Late last year, Sempra announced an agreement to supply around 2.25 Mtpa of LNG to RWE Supply & Trading, a unit of German energy firm RWE, on a free-on-board basis for 15 years.
Many European countries are look for options to receiving natural gas from Russia since it’s invasion of Ukraine.
The deal also includes provisions for exploring ways to lower the carbon intensity of the LNG produced from the Port Arthur LNG Phase 1 project currently under development in Jefferson County, Texas. This may involve implementing greenhouse gas emission reduction strategies and a continuous improvement approach.
Sempra also announced that investment firm KKR has agreed to acquire an indirect, non-controlling interest of 25 per cent to 49 per cent in the Port Arthur LNG Phase 1 project. Under the deal with KKR, Sempra Infrastructure will retain certain economic and other rights related to the project while KKR will be granted certain minority interest protections. The investment will be made primarily by KKR’s Global Infrastructure Investors IV fund.
Sempra Infrastructure says it is targeting 20 per cent to 30 per cent of indirect ownership interest in the project, subject to the closing of the KKR sale.
The long-term contractable capacity of around 10.5 mtpa for the Port Arthur Phase 1 project has been completely subscribed under binding long-term agreements with Engie, INEOS, PKN Orlen, RWE Supply and Trading and ConocoPhillips, all of which became effective upon reaching final investment decision.
The Phase 1 project is expected to create an estimated 5,000 jobs during construction and boost the economies in Port Arthur and Jefferson County.
Sempra Infrastructure Partners is 70 per cent owned by San Diego-based utility holding company Sempra, which also owns San Diego Gas & Electric and Southern California Gas.
The Gulf Coast LNG terminals take natural gas produced from US wells and then utilize refrigeration trains to chill the natural gas to temperatures to minus 260 degree Fahrenheit (minus 162 Celsius). This converts the gas into a liquid, which is then exported to regasification units in other nations and then used for heating and power generation.
The dramatic rise in LNG export capacity was made possible by the shale gas drilling revolution combining hydraulic fracturing and directional drilling. US production broke yet another record last year by topping 90 billion cubic feet per day, according to reports.
