Home Optimal energy Sempra Energy (SRE) and Williams (WMB) Announce Preliminary Agreements for LNG Offtake, Gas Supply and Associated Pipeline Projects

Sempra Energy (SRE) and Williams (WMB) Announce Preliminary Agreements for LNG Offtake, Gas Supply and Associated Pipeline Projects


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Sempra infrastructurea subsidiary of sempra (NYSE: SRE) (BMV: SRE), today announced that it has entered into a principal agreement (HOA) with Williams (NYSE: WMB) for the extraction of liquefied natural gas (LNG) and the development of associated gas pipeline projects to further connect the abundant US natural gas supplies in the Gulf Coast region to markets around the world.

The HOA contemplates the negotiation and finalization of two 20-year long-term sale and purchase agreements for approximately 3 million tonnes per annum (Mtpa) of LNG in total from the Port Arthur LNG project under development in the Jefferson County, Texas, and the Cameron Phase 2 LNG Project under development in Hackberry, Louisiana. The HOA is also considering negotiating a separate natural gas sales agreement for approximately 0.5 billion cubic feet per day (Bcfd) to be delivered to the Gillis, Louisiana area as feedstock gas supply for referenced LNG projects.

Additionally, Sempra Infrastructure and Williams plan to form a strategic joint venture to own, expand and operate the existing 2.35 Bcfd Cameron Interstate Pipeline which is expected to deliver natural gas to the Cameron LNG Phase 2 project under development, as well as to the Port Arthur project. Louisiana Connector pipeline that is expected to deliver natural gas to the proposed Port Arthur LNG facility.

“We are excited to continue to advance our U.S. Gulf Coast LNG and associated pipeline projects as we work to meet growing global demand for cleaner, more reliable energy sources,” said Justin Bird, CEO of Sempra Infrastructure. “We look forward to advancing our relationship with Williams, a like-minded company that shares our commitment to building a future of energy abundance, affordability and security.”

“Williams is excited to continue this strategic transaction with Sempra Infrastructure. We see this as an opportunity to combine our capabilities across the natural gas value chain and increase the delivery of low-carbon, affordable and cost-effective natural gas. reliable, from the wellhead to the growing international market,” said Alan Armstrong, President and CEO of Williams. “To facilitate the delivery of next-generation natural gas to ease domestic energy constraints and overseas, while helping to achieve national and global climate goals, is central to our natural gas-focused strategy, and we look forward to being well-aligned with Sempra Infrastructure’s unique capabilities and competitive advantages in the field of LNG infrastructure.

Port Arthur LNG has the potential to become one of the largest LNG export facilities in North America. Phase 1 of Port Arthur LNG is authorized and is expected to include two liquefaction trains and LNG storage tanks, together with associated facilities capable of producing, under optimum conditions, up to approximately 13.5 Mtpy of LNG. Sempra Infrastructure recently announced that it expects to make a final investment decision for Phase 1 of the liquefaction project in the first quarter of 2023. Additionally, the company announced last month that it had amended and restated its contract engineering, procurement and construction with Bechtel Energy for Phase 1. Port Arthur LNG Phase 2 is being developed as a similar sized project located alongside the Phase 1 project.

The Cameron LNG Phase 2 project is expected to include a single LNG train with a maximum production capacity of 6.75 Mtpy of LNG, as well as the debottlenecking of the three existing LNG trains. The project is expected to include certain design improvements resulting in a more cost-effective and efficient installation, while also reducing overall greenhouse gas emissions.

The referenced HOA is a preliminary, non-binding agreement, and the development of Sempra Infrastructure’s LNG and associated pipeline projects remains subject to a number of risks and uncertainties, including entering into definitive agreements, obtaining all the necessary permits, the signing of engineering and construction contracts, if applicable. , obtain funding and reach a final investment decision for each project.