Sempra (NYSE: SRE) disclosed that it has inked a head of agreement (HOA) with RWE Supply & Trading which is a subsidiary of RWE (RWE: AG), for the acquisition of nearly 2.25 million tonnes per annum (Mtpa) of liquefied natural gas (LNG). The LNG will be delivered free-on-board on a long-term basis from the Port Arthur LNG Phase 1 facility in Jefferson County, Texas.
The HOA envisions the signing of a definitive 15-year LNG sale and purchase agreement for 2.25 Mtpa of LNG to be delivered from the Port Arthur LNG project. Sempra Infrastructure and RWE have also agreed to collaborate on a broad framework for reducing, mitigating, and reporting GHG emissions associated with LNG deliveries from the Port Arthur LNG project, which will include addressing the use of responsibly sourced natural gas as part of the project’s feed gas supply and renewable energy as part of the project’s power mix.
The referenced HOAs are non-binding preliminary agreements, and the Port Arthur LNG project’s development is still dependent on several risks and uncertainties, including reaching definitive agreements, maintaining all necessary permits, finalizing engineering and construction agreements, acquiring financing, and incentives, and reaching a final investment decision.
The first phase of the Port Arthur LNG project is fully permissible. Furthermore, it is anticipated to include two liquefaction trains and LNG storage tanks, as well as associated facilities capable of producing, under optimal conditions, up to nearly 13.5 Mtpa of LNG. Sempra Infrastructure’s LNG projects are perfectly positioned to help offer US LNG to support America’s friends in Europe’s energy security while also speeding the shift to a lower-carbon future.
Sempra said that it sees the potential to collaborate with RWE on LNG, hydrogen, and renewables as part of the energy transformation. It makes substantial progress toward the development of its Port Arthur LNG project with today’s agreement, and it remains dedicated to cutting greenhouse gas (GHG) emissions across the LNG value chain by implementing innovative technologies and improving key processes.