Sempra Infrastructure, thanks to a long-term contract with Orlen, has secured a portfolio of contracts to enable a decision to build the Port Arthur LNG export terminal in Texas, the US company announced. Deliveries from the terminal would start in 2027.
According to Sempra’s announcement, the future liquefaction capacity of the Port Arthur terminal has been fully contracted at 10.5 million tonnes of LNG per year, thanks to the agreement signed with Orlen on Wednesday.
The conclusion of this contract allows the final investment decision (FID) to be taken, which should happen soon, Sempra Infrastructure CEO Dan Brouillette told reporters. “Very soon after this decision is taken, we will start construction and we hope to have the first liquefied gas flowing from the plant in early 2027,” he – he explained. He stressed, in addition to the export contracts, Sempra already has relevant agreements with gas producers in Texas.
The contract with Orlen, as with other contractors, has a FOB (Free On Board) formula, meaning that it is the buyer who provides transportation from the terminal and can ship the LNG anywhere in the world.
According to the contract signed with Sempra, Orlen is to receive 1 million tonnes of LNG per year from the Port Arhtur terminal from 2027 for 20 years. As of November 2022. Sempra has entered into a number of contracts to receive LNG from the terminal. The contract with Germany’s RWE is for 2.25 million tonnes per year for 15 years from 2027. The contract with Engie is for the supply of 0.875 million tonnes of LNG each for 15 years. The contract with INEOS is for this company to receive 1.4 million tonnes of LNG per year for 20 years. The largest contract Sempra has signed with ConocoPhillips is for the supply of 5 million tonnes of LNG per year for 20 years.
In 2018. PGNiG entered into a long-term contract with Port Arthur LNG, a subsidiary of Sempra, to purchase approximately 2 million tonnes of LNG per year for 20 years from the Port Arthur terminal, with an originally planned completion date of no earlier than 2023. However, Sempra delayed the final investment decision for the construction of Port Arthur LNG in May 2021, explaining this by the difficult market conditions after the pandemic. The only contract for the Port Arthur terminal was actually with PGNiG. In July 2021. PGNiG broke that contract, contracting more gas from Venture Global. Sempra picked up customers for LNG from the planned terminal in 2022, when the gas boom improved significantly.
PKN Orlen has signed an LNG supply contract with Sempra
On Wednesday, PKN Orlen CEO Daniel Obajtek and US Sempra Infrastructure head Dan Brouillette signed a long-term LNG supply contract. The contract is for the supply of 1 million tonnes of LNG from the US per year for 20 years from 2027.The gas is to come from the Port Arthur terminal in Texas.