Sempra Infrastructure, Bechtel sign EPC contract for Port Arthur LNG Phase 2

Sempra Infrastructure and Bechtel Energy have signed a fixed-price engineering, procurement, and construction (EPC) contract for the Port Arthur LNG Phase 2 project under development in Port Arthur, Texas, Sempra Infrastructure announced on July 18.

As part of the EPC contract, Bechtel will undertake detailed engineering, procurement, construction, commissioning, startup, performance testing, and operator training activities for the project. The agreement also includes provisions for pre-final investment decision work to ensure project cost and schedule certainty.

Port Arthur LNG has direct access to the Gulf of Mexico. The 13mn tonnes/year Phase 1 is already under construction following a final investment decision (FID) in March 2023. Phase 2 would also add an additional LNG storage tank to the two tanks in Phase 1 and a marine berth and would double the capacity of the project. The US Federal Energy Regulatory Commission (FERC) approved the second phase in September 2023. Phase 1's expected commercial operation dates for train 1 and train 2 are set for 2027 and 2028, respectively.

In June, Sempra Infrastructure and Aramco signed a non-binding heads of agreement for the purchase of 5mn tonnes/year of LNG and a 25% equity investment in the Port Arthur LNG Phase 2 project. In December 2022, Port Arthur LNG Phase 2 and Ineos also entered into a non-binding agreement for an offtake capacity of 2mn tonnes/year from the project.

The development of the Port Arthur LNG Phase 2 project remains subject to several risks and uncertainties, including completing the required commercial agreements, securing and maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors, Sempra Infrastructure noted.