Sempra, Bechtel Sign Revised Contract for Port Arthur LNG Phase 1

Initial facilities along the Sabine River in Texas will be capable of producing up to 13.5 mtpa of LNG.

Sempra and Bechtel have agreed on a revised price of $10.5 billion for Phase 1 of the new LNG plant.

Sempra has amended and restated the fixed-price engineering, procurement, and construction contract for the proposed Port Arthur LNG Phase 1 liquefaction project with engineering firm Bechtel. The contract includes an updated price of approximately $10.5 billion. The companies signed the initial agreement in March 2020, but Sempra delayed a final investment decision on the new plant by at least a year due to a COVID-19-induced drop in demand. The original price was never disclosed.

Under the EPC contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing, and operator training activities for Phase 1 of the project.

“We are excited to achieve this milestone with Bechtel,” said Justin Bird, chief executive of Sempra Infrastructure. “The execution of the final contract is a critical step in advancing Phase 1 of Port Arthur LNG toward a final investment decision. Based on robust customer interest, we know that Port Arthur LNG is highly attractive to the global market, and we look forward to providing customers with access to secure, abundant, and reliable US LNG.”

The Phase 1 project is permitted and expected to include two natural gas liquefaction trains and LNG storage tanks, and associated facilities capable of producing up to about 13.5 mtpa of LNG. A similarly sized Port Arthur LNG Phase 2 project is under active marketing and development.

Earlier this year, Sempra Infrastructure announced the substantial completion of marketing for Phase 1 with the signing of a series of nonbinding agreements with the Polish Oil & Gas Company, RWE Supply & Trading, INEOS Energy Trading, and ConocoPhillips.

Development of Phase 1 and Phase 2 of the project is contingent upon completing the required commercial agreements, securing all necessary permits, obtaining financing, and reaching a final investment decision.