Aramco and Sempra strengthen partnership with new LNG supply agreement

Aramco and Sempra have announced that their respective subsidiaries have signed a sale and purchase agreement (SPA) and established a 20-year preliminary non-binding LNG supply agreement(HoA) to strengthen mutual commercial interests.

The strategic LNG supply agreement

This agreement provides for the extraction of 5 million tons per annum(Mtpa) from the Port Arthur LNG Phase 2 expansion project and Aramco’s 25% equity participation in the project. One of the objectives is to finalize a binding LNG SPA and definitive agreements with terms similar to those of the HoA, subject to various conditions.

Aramco Chairman Nasir K. Al-Naimi expressed his enthusiasm for moving forward in the LNG sector, highlighting that his company, as a potential strategic partner, is well positioned to expand its gas portfolio and meet the growing global demand for low-carbon energy.

For his part, Jeffrey W. Martin, Sempra’s president and chief executive officer, emphasized that the expansion of Port Arthur LNG will allow for a wider distribution of U.S. natural gas in global energy markets. In addition, the expansion of this facility will help improve energy security and provide a low-carbon alternative to coal.

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LNG expansion through the Gulf of Mexico

The Port Arthur LNG terminal, located in southeast Texas with access to the Gulf of Mexico, is currently under construction with its Phase 1, which includes two liquefaction trains, two LNG storage tanks and other associated facilities. Phase 2 of the project seeks to expand the site with the addition of up to two additional trains, capable of producing up to 13 Mtpa.

Within Sempra Infrastructure’s flagship Port Arthur Energy Hub, Port Arthur LNG has the potential to expand to a total of eight trains, positioning it as one of the largest LNG export facilities in the world.

In addition, Sempra Infrastructure is developing infrastructure projects at the Port Arthur Energy Hub to meet the growing demand for low-carbon fuels, including the proposed Titan carbon sequestration project.

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Source and photo: Aramco