Sempra, PKN ORLEN Sign LNG Sale and Purchase Agreement

The deal for 1 mtpa results in the planned initial phase of Port Arthur LNG plant being fully subscribed.

Render of planned Phase 1 of Sempra's Port Arthur LNG plant.
SOURCE: Sempra

Sempra Infrastructure, a subsidiary of Sempra, has entered into a long-term sale and purchase agreement with PKN ORLEN for the supply of LNG from the Port Arthur LNG Phase 1 project under development in Jefferson County, Texas. With this agreement, Sempra said the projected LNG offtake capacity for the Phase 1 project is now fully subscribed under binding long-term agreements.

PKN ORLEN is an oil refiner and petrol retailer in Central Europe. The company recently acquired the Polish Oil & Gas Company (PGNiG). Under the agreement, PKN ORLEN has agreed to purchase approximately 1 mtpa of LNG from the Port Arthur LNG Phase 1 project on a free-on-board basis for 20 years.

Last May, Sempra and PGNiG entered into a heads of agreement for the purchase of around 3 mtpa of LNG delivered free-on-board from Sempra Infrastructure's portfolio of LNG projects in North America, including the Port Arthur plant.

“With the long-term offtake capacity for Phase 1 now sold under binding agreements, we expect to reach FID later this quarter and commence construction on the Port Arthur LNG Phase 1 project to help meet the increasing demand for LNG across Europe and the rest of the world,” said Justin Bird, chief executive of Sempra Infrastructure.

Sempra Infrastructure previously announced it had entered into long-term agreements with each of ConocoPhillips, INEOS, ENGIE, and RWE for the sale and purchase of LNG from the proposed Phase 1 project. In aggregate, Port Arthur LNG Phase 1 now has 10.5 mtpa under binding long-term agreements. First cargo deliveries from the plant are expected in 2027.

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 Phase 2 project is also being marketed and developed.

Sempra added that development of the projects is contingent upon completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision.