An interim participation agreement between Sempra Energy and Aramco for the 11 million tpa Port Arthur LNG export project in Texas, US, has expired without a final deal.
Under the initial agreement, announced in late 2019, Aramco would have taken a 25% stake in the project and purchased 5 million tpa of LNG from it. Sempra gave its annual investor day presentation on 29 June 2021. SP Global reports that during the presentation, Justin Bird, CEO of Sempra’s energy infrastructure arm Sempra Energy, said that the two companies had mutually agreed to let the deal expire.
Bird told investors that Aramco has been re-evaluating its ambitions for gas as a result of the volatile gas marks and the COVID-19 pandemic, citing that as the main reason for the two companies failing to finalise the deal. He added, however, that the companies will maintain a relationship and that Sempra Energy will partner with Aramco in future.
Sempra CEO Jeffrey Martin confirmed that the Energia Costa Azul liquefaction project in Mexico is now the company’s main LNG priority. In February 2021 it was confirmed that the facility will use Air Products’ LNG heat exchanger technology. The company will also prioritise expansion work at Cameron LNG in Louisiana, US, over the Port Arthur project. Sempra delayed the final investment decision on Port Arthur in May 2021, citing commercial challenges.
Bird said that Sempra is considering design changes to the Port Arthur facility to lower its carbon emissions, including carbon capture and storage, and is pursuing opportunities with interested parties. A 2 million tpa sales and purchase agreement with Poland’s PGNiG, signed in December 2018, may be moved to the Cameron LNG expansion project.
Sempra is also planning a gas storage project in Hackberry, Louisiana, US, and ultimately plans a 45 million tpa LNG portfolio in North America.