Sempra Infrastructure and JERA Forge Agreement for Long-Term LNG Supply

Sempra Infrastructure and JERA: A Significant Agreement for LNG Supply



In a notable advancement in energy collaboration, Sempra Infrastructure, a subsidiary of Sempra, has entered into a non-binding heads of agreement (HOA) with JERA Co., Inc., Japan's leading power generation company. This agreement sets the stage for a long-term partnership focused on liquefied natural gas (LNG), with a plan to supply approximately 1.5 million tonnes per annum (Mtpa) over the course of 20 years. The LNG is set to be sourced from the Port Arthur LNG Phase 2 development project located in Jefferson County, Texas.

Justin Bird, CEO of Sempra Infrastructure, expressed his enthusiasm for this collaboration, stating, "We are pleased to collaborate with JERA, as they work with the United States to diversify their energy sources, enhancing the resilience and reliability of their supply. This agreement represents a pivotal step forward towards the final investment decision for the project, extending the reach of U.S. natural gas into global markets."

Strategic Position and Development


The Port Arthur LNG Phase 2 project is strategically positioned and is currently under active marketing. Future phases of the project are also in the initial stages of development. All necessary permits have already been obtained, making it a significantly advanced project. The development is anticipated to include two liquefaction trains that collectively will produce around 13 Mtpa of LNG, potentially doubling the production capacity of the Port Arthur LNG facility from the Phase 1 output, which is still under construction.

In May, the project received authorization from the U.S. Department of Energy to export LNG to non-free trade agreement countries, further enhancing its viability in the global market. Additionally, in September 2023, the Federal Energy Regulatory Commission granted its approval. The Phase 1 project is expected to commence commercial operations in 2027 and 2028.

Partnerships and Future Prospects


The groundwork for this ambitious project has been solidified through previous agreements. In June 2024, Sempra Infrastructure, alongside a subsidiary of Aramco, signed a preliminary HOA for both a long-term LNG offtake agreement and an equity investment in the Port Arthur LNG Phase 2 project. Following this, Bechtel was selected in July 2024 to undertake a fixed-price engineering, procurement, and construction contract for the project.

Despite the encouraging developments, Sempra acknowledges that the Port Arthur LNG Phase 2 remains vulnerable to various risks and uncertainties. These include the completion of necessary commercial agreements, maintaining all requisite permits, securing financing, and ultimately reaching a final investment decision. Each of these elements is critical to the successful realization of the project.

About Sempra Infrastructure


Sempra Infrastructure, headquartered in Houston, is committed to enhancing global energy solutions by developing, constructing, and operating modern energy infrastructure, including LNG facilities. Their efforts play an integral role in shaping the energy systems of the future. As a key subsidiary of Sempra (NYSE: SRE), Sempra Infrastructure aims to connect customers to reliable and safe energy, while also promoting energy security.

As we look towards the future, this agreement not only amplifies the collaborative efforts between the United States and Japan but also signifies a meaningful step towards enhancing global energy security through diversified sourcing.

Topics Energy)

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