Sempra Energy (NYSE: SRE) and Bechtel today announced that their respective subsidiaries, Port Arthur LNG, LLC and Bechtel Oil, Gas, and Chemicals, Inc., have signed a fixed-price engineering, procurement and construction (EPC) contract for the Port Arthur LNG liquefaction project under development in Port Arthur, Texas.
“Building new export infrastructure in the U.S. is critical to providing overseas markets with cleaner fuel alternatives,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy. “Partnering with a world-class construction firm like Bechtel bolsters our execution plan for one of the world’s largest LNG development projects.”
Bechtel’s Chairman and CEO Brendan Bechtel said, “We are honored and grateful that Sempra has chosen Bechtel as their trusted partner to help grow Sempra’s LNG business on the Gulf Coast. Together, we will deliver an important, clean and sustainable energy source to the world while creating jobs and building economic opportunities for the Gulf Coast community.”
As part of the EPC contract, Bechtel Oil, Gas, and Chemicals, Inc. will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing and operator training activities for the project. The scope of the agreement also includes continuing pre-final investment decision engineering to better assure project cost and schedule certainty.
The Port Arthur LNG development project is expected to initially include two liquefaction trains, two liquefied natural gas (LNG) storage tanks, a marine berth and associated loading facilities and related infrastructure necessary to provide liquefaction services, with a nameplate capacity of approximately 13.5 million tonnes per annum (Mtpa) of LNG. The project site sits on nearly 3,000 acres of land along three miles of the Sabine-Neches waterway and has the potential to become one of the largest LNG export projects in North America, with expansion capabilities of up to eight liquefaction trains and approximately 45 Mtpa of capacity.
“Port Arthur LNG plays an important role in Sempra’s goal of becoming one of North America’s largest developers of liquefaction-export infrastructure projects and we look forward to continuing to move the project forward,” added Martin.
In January, Sempra LNG signed an Interim Project Participation Agreement (IPPA) with Aramco Services Company, a subsidiary of Saudi Aramco, for the proposed Port Arthur LNG project. The IPPA represents another milestone for both companies after signing a heads of agreement in May 2019 for the potential purchase of 5 Mtpa of LNG and a 25% equity investment in the project. In December 2018, Port Arthur LNG entered into an agreement with Polish Oil and Gas Company for the sale and purchase of 2 Mtpa of LNG per year.
The Port Arthur LNG development project received authorization from the U.S. Department of Energy to export domestically produced LNG to countries that do not have a free trade agreement with the U.S. in May 2019. Additionally, the Federal Energy Regulatory Commission issued the approval to site, construct and operate the liquefaction-export facility in April 2019.
It is estimated that the proposed project will create a craft workforce on site that peaks at about 5,000 construction jobs, as well as several hundred additional Texas jobs in support of the project, including material fabrication. Nearly 200 long-term jobs will be created to operate and maintain the Port Arthur LNG facility.
Development of the Port Arthur LNG project is contingent upon obtaining additional customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, incentives and other factors, and reaching a final investment decision.
About Sempra Energy
Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $65 billion in total assets reported in 2019, the San Diego based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' more than 20,000 employees deliver energy with purpose to over 40 million consumers worldwide. The company is focused on the most attractive markets in North America, including California, Texas, Mexico and the LNG export market. Sempra Energy has been consistently recognized for its leadership in diversity and inclusion, and sustainability, and is a member of the S&P 500 Utilities Index and the Dow Jones Utility Index. The company was also named one of the “World’s Most Admired Companies” for 2020 by Fortune Magazine.
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Sempra LNG and Port Arthur LNG, LLC are not the same as the California utilities, San Diego Gas & Electric Company or Southern California Gas Company, or Oncor Electric Delivery Company LLC and are not regulated by the California Public Utilities Commission.