Port Arthur LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.

Port Arthur LNG Terminal is a proposed LNG export terminal in Texas, United States.


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Phase I Project Details

  • Owner: Port Arthur LNG, LLC; PALNG Common Facilities Company, LLC[1]
  • Operator: Sempra Energy [70%], ConocoPhillips [30%][2][3]*
  • Parent: Sempra Energy[4]
  • Location: Port Arthur, Texas, United States
  • Coordinates: 29.81166342, -93.95962882 (approximate)[1]
  • Capacity: 13.5 mtpa[1]
  • Cost: US$10.5 billion[5]
    • Formerly US$8-9 billion[6]
  • Financing: JPMorgan Chase is the project's Financial Advisor[7]
  • Status: Proposed, Pre-FID[8]
  • Type: Export
  • Trains: 2[1]
  • Start Year: Expected 2023

*As of July 2022, ConocoPhillips owns a 30% stake in Phase I, and Sempra Energy owns the remaining 70%. This ownership ratio is presumed to be true for the two LLCs that own Phase I.

Phase II Project Details

  • Owner: Port Arthur LNG Phase II, LLC; PALNG Common Facilities Company, LLC[9]
  • Parent: Sempra Energy[4]; ConocoPhillips*
  • Location: Port Arthur, Texas, United States
  • Coordinates: 29.81166342, -93.95962882 (approximate)[1]
  • Capacity: 13.5 mtpa[10]
  • Status: Proposed, Pre-FID[8]
  • Type: Export
  • Trains: 2[10]
  • Start Year: Expected 2023

*As of July 2022, because ConocoPhillips owns a 30% stake in Phase I, it is presumed to be a parent company in the proposed Phase II.


Port Arthur LNG Terminal is a proposed LNG terminal in Texas, United States.[11] The proposed export facility received approval from the US Department of Energy to export LNG to Free Trade Agreement (FTA) countries in August of 2015.[12] The project expects to receive Federal Energy Regulatory Commission approval and Department of Energy non-FTA authorization in mid 2018, with operation in 2023.[13]

The original proposal was only for Phase I, which included 2 trains with a total of 13.5 million tonnes per year (mtpa) production capacity. Eventually, Phase II was proposed for an additional 2 trains and another 13.5 million tonnes per year (mtpa) production capacity. This brings the proposal to 4 trains with a total of 27 mtpa.[1][10]

In December 2018, Port Arthur LNG, LLC and the Polish Oil & Gas Company (PGNiG) announced they had agreed on a 20-year sale-and-purchase agreement for supply of LNG. The agreement is for the sale and purchase of 2 Mtpa, or approximately 2.7 billion cubic meters per year. Sempra Energy said this was enough natural gas to meet approximately 15% of Poland's daily needs. The agreement is dependent on Port Arthur LNG making a final investment decision (FID).[14]

In April of 2019, the U.S. Federal Energy Regulatory Commission (FERC) approved the construction of Phase I of the Port Arthur Terminal.[15]

In May of 2019, Sempra Energy got approval to export LNG to countries that do not have a free-trade agreement with the U.S. The approval to export to non-free trade agreement countries is necessary for American LNG operators that want to tap into Asian markets.[16]

In June of 2019, Sempra Energy asked FERC to approve a significant expansion of the associated pipeline that would boost the export capacity.[17]

Also in May of 2019, Saudi Aramco agreed to a buy a stake in Sempra Energy's Port Arthur LNG export terminal, giving the world's biggest oil exporter a foothold in the U.S. gas trade. The proposed deal, which also includes an agreement to buy gas from the plant, would mark Aramco's first entry into production of oil or gas outside Saudi Arabia. Aramco can potentially ship the LNG home to the kingdom’s power plants or trade it globally. The state-owned company and Sempra signed a preliminary agreement to acquire a 25% stake in the plant, but didn't disclose the value of the potential deal.[18]

In March of 2020, Sempra Energy selected Bechtel for the engineering, procurement, and construction (EPC) of the Port Arthur LNG export terminal in Houston, Texas.[19] At the same time, the company pulled back from its previous intention to reach FID in the third quarter of 2020 owing to unfavourable LNG market conditions which have been exacerbated by the coronavirus pandemic.[20]

In April 2020, FERC released its environmental review schedule for Phase II, and expects to issue its official Environmental Assessment on January 15, 2021. Other federal agencies with jurisdiction over the project will have until April 15, 2021 to complete their review.[21]

The final investment decision (FID) for the project was originally expected in 2020, but in May 2020 Sempra announced that they were delaying the decision until 2021.[22]

In September 2020, Bloomberg reported that Saudi Aramco's mooted acquisition of a 25% stake in the Port Arthur project was under review by the company as it looked to cut back on its capital expenditure as a result of increasing pressure for it to deliver on its US$75 billion annual dividend commitment to shareholders. It was reported that Saudi Aramco had withdrawn some staff members from the project.[23]

In April, 2021, Sempra said it had agreed to sell a 20% interest in its Sempra Infrastructure Partners unit to private equity firm KKR & Co. Inc. for US$3.37 billion in cash.[24]

On an investor call in May 2021, Sempra's Chief Financial Officer Trevor Mihalik said that, owing to commercial challenges, the company was further delaying FID for the Port Arthur project to 2022.[25]

In June 2021, Sempra disclosed that it had mutually agreed with Saudi Aramco to let expire their preliminary agreement from 2019 which was intended to see Saudi Aramco take a 25% stake in the project and offtake 5 million mtpa of supply from the terminal. This decision was likely to impact the timeline for reaching FID.[26] The supply and purchase agreement which Sempra made with Poland's PGNiG in 2018 has also been terminated.[27] Sempra has said that the expansion of its Cameron LNG Terminal, predicted to reach FID by the end of 2022, is now more of a priority than Port Arthur, which suggests that FID for the project has now been pushed out to 2023 at the earliest.[28]

In July 2021, PGNiG terminated its 20-year contract to purchase LNG from Sempra citing the project's delays.[29]

Local community group Port Arthur Community Action Network (PACAN) has raised around ten different points with the Texas Commission on Environmental Quality (TCEQ) over Sempra's request for air emission permits for phase 2 of the terminal project. In August 2021, PACAN succeeded in gaining an additional hearing after TCEQ officials asked to learn more about their concerns. The scale of the project and the emissions it could create are thought to have influenced certain of the officials to opt for additional time and effort to further consider the permitting process.[30]

In May 2022, PGNiG returned to Sempra to sign a 20-year non-binding heads of agreement (HOA) for about 1 mtpa of LNG from the facility.[31] Sempra also signed an HOA with RWE Supply & Trading under which it may purchase 2.25 mtpa of LNG.[32]

In June 2022, Britain's INEOS Energy signed a 20-year sales and purchase agreement under which it would purchase 1.4 mtpa from either Sempra's Port Arthur LNG Phase 1 or Cameron LNG Terminal Phase 2 projects.[33]

In July 2022, ConocoPhillips signed a Heads of Agreement (HOA) with Sempra under which it would acquire 5 mtpa of the fuel produced by Phase 1, supplying gas for its share of the output, and take a 30% stake in Phase 1 of the project.[2][3]

Articles and resources


  1. 1.0 1.1 1.2 1.3 1.4 1.5 "Liquefaction Project". Retrieved 2022-05-16.
  2. 2.0 2.1 "ConocoPhillips to acquire 30% stake in Sempra's Port Arthur LNG project". Reuters. Retrieved 2022-07-20.
  3. 3.0 3.1 Sempra and ConocoPhillips announce landmark “heads of agreement” to develop Port Arthur LNG, more. PA News. July 14, 2022.
  4. 4.0 4.1 Port Arthur LNG. Port Arthur LNG. Accessed May 2022.
  5. "Sempra, Bechtel Amend $10.5B Deal For Port Arthur LNG". www.rigzone.com. Retrieved 2022-11-08.
  6. Louise Poirier,Bechtel Named EPC Contractor on Sempra’s Port Arthur LNG Project, Engineering News Record, Mar. 5, 2020
  7. TRANSACTION DATA: Port Arthur LNG, IJGlobal, accessed May 6, 2021
  8. 8.0 8.1 U.S. Liquefaction Capacity, Energy Information Administration, Nov. 3, 2020
  9. Port Arthur LNG Phase II, LLC; PALNG Common Facilities Company, LLC; Notice of Availability of the Environmental Assessment for the Proposed Port Arthur LNG Expansion Project. Federal Register. January 26, 2021
  10. 10.0 10.1 10.2 "Expansion". Retrieved 2022-05-16.
  11. About Port Arthur LNG, Port Arthur LNG, accessed May 2017
  12. Port Arthur LNG Facility, Texas, United States of America, Hydrocarbons Technology, accessed 17 June 2017
  13. About Port Arthur LNG: Project Schedule, Port Arthur LNG, accessed 17 June 2017
  14. Sempra Energy Subsidiary And Polish Oil & Gas Co. Sign Definitive Agreement To Export US LNG To Europe, Sempra Energy press release, Dec. 19, 2018
  15. U.S. FERC approves two new LNG export terminals in Texas and Louisiana Reuters, Apr. 18, 2019
  16. Marissa Luck, Sempra Energy's Port Arthur LNG hits another milestone Houston Chronicle, May 3, 2019
  17. Carl Surran, Sempra seeks pipeline expansion for Port Arthur LNG Seeking Alpha, June 24, 2019
  18. Anthony DiPaola, SLNG megadeal in works for Port Arthur terminal Beaumont Enterprise, May 22, 2019
  19. Charlie Bartlett, Sempra Energy and Bechtel team up on Port Arthur LNG project Dredging and Port Construction, March 26, 2020
  20. Scott DiSavino and Shradha Singh, Sempra confirms decision on Mexico LNG project, may delay decision on Texas plant, Reuters, March 24, 2020
  21. FERC Releases Environmental Review Schedule for Port Arthur Expansion, Lexology, April 20, 2020
  22. Final investment decision on Port Arthur LNG project in Texas delayed until 2021, S&P Global Platts, May 4, 2020
  23. Verity Ratcliffe, Anthony DiPaola, Matthew Martin, Aramco Shelves $20 Billion Petrochemical Plan After Oil's Crash, Bloomberg, Sep. 3, 2020
  24. Corey, Paul (April 5, 2021). "LNG Project Tracker: Commercial talks pick up as field of developers shrinks". S&P Global Market Intelligence. Retrieved 2021-05-22.
  25. Harry Weber, "Port Arthur LNG final investment decision likely to be delayed to 2022: Sempra", S&P Global, May 5, 2021
  26. Harry Weber, "Sempra, Saudi Aramco unable to finalize supply agreement tied to Port Arthur LNG", S&P Global, Jun. 29, 2021
  27. Harry Weber, "GLOBAL GAS: US LNG supply buildout uncertainty tests global market as Gastech reconvenes", S&P Global, Sep. 13, 2021
  28. Caroline Evans, ‘Return of North American LNG FIDs’ Seen in 2022 — LNG Spotlight, Natural Gas Intelligence, Sep. 17, 2021
  29. "Polish PGNiG ends LNG deal over U.S. Texas Port Arthur delays," Reuters, July 27, 2021.
  30. Jacob Dick, PA group nets hearing for Port Arthur LNG permits, Beaumont Enterprise, Aug. 27, 2021
  31. Poland's PGNiG secures LNG supply from U.S. firm Sempra. Reuters. May 16, 2022.
  32. Sempra Infrastructure and RWE Sign Heads of Agreement for U.S. LNG Supply. Sempra. May 25, 2022.
  33. "Britain's Ineos signs 20-yr LNG deal with Sempra Infrastructure". Reuters. 2022-06-22. Retrieved 2022-07-07.

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