Sempra and ConocoPhillips Deepen Collaboration with New LNG Agreement in Texas

Sempra and ConocoPhillips Extend Partnership with Long-Term LNG Agreement

In an important development for the energy sector, Sempra Infrastructure, a subsidiary of Sempra Energy, and ConocoPhillips have solidified their partnership by signing a definitive 20-year sale and purchase agreement (SPA) to secure 4 million tonnes per annum (Mtpa) of liquefied natural gas (LNG) from the Port Arthur LNG Phase 2 project located in Jefferson County, Texas.

This agreement marks a significant step in both companies' strategic initiatives, aligning with the increasing demand for U.S. LNG from foreign markets. Jeffrey W. Martin, Sempra’s CEO, emphasized the growing importance of U.S. LNG in meeting the energy security requirements of allied nations, and expressed excitement over the expansion of their collaboration.

“Extending our partnership with ConocoPhillips on the Port Arthur LNG facility reflects our shared vision of connecting American natural gas producers with expanding markets worldwide,” stated Martin. He added that this development is not just crucial for overseas markets but also aims to foster economic growth and job creation in the United States.

Ryan Lance, ConocoPhillips' Chairman and CEO, echoed this sentiment by stating that the new SPA enhances their global LNG portfolio strategy and creates a reliable LNG supply network to cater to the rising global energy demand.

The Port Arthur LNG project already has a foundation through its Phase 1, where ConocoPhillips holds a 30% equity stake and previously secured 5 Mtpa of offtake capacity for two decades. With construction advancements, Phase 1 is on track to be operational by 2027 and 2028, with two liquefaction trains and LNG storage tanks already under assembly.

Looking towards Phase 2, this upcoming expansion will also consist of two new liquefaction trains that aim to boost the facility's total production capacity to around 26 Mtpa, nearly doubling its current capability. Further phases of the Port Arthur project are also being explored to meet the future energy landscape’s requirements.

In the context of increasing international interest, Sempra Infrastructure recently announced a 20-year SPA with JERA Co., Inc. for 1.5 Mtpa of free-on-board LNG offtake from the same project. This deal highlights the strategic positioning of the Port Arthur development and strengthens its appeal in the competitive global LNG market.

Permit acquisition for the Phase 2 project has made noteworthy progress, with the Federal Energy Regulatory Commission granting approval in September 2023, followed by the Department of Energy's export authorization in May 2025. This approval enables LNG exports to nations that do not have a free trade agreement with the United States, ensuring broad market access.

Moreover, all essential permits for the Phase 2 project have been secured, significantly enhancing the prospects for Sempra and ConocoPhillips to proceed effectively. Additionally, Sempra has appointed Bechtel for the engineering, procurement, and construction of the new facility, further accelerating the development timeline.

Despite the positive strides, the development of the Port Arthur LNG Phase 2 project is still subject to several uncertainties. These range from the establishment of requisite commercial agreements to financing, and ultimately to a final investment decision expected later in 2025. Given the project's current momentum and strategic importance, both companies are well-positioned to navigate these challenges.

The announcement is part of Sempra’s broader strategy to execute its five value creation initiatives, targeting effective risks while propelling future growth. As these endeavors unfold, Sempra aims to enhance shareholder value and provide meaningful benefits to consumers, reaffirming its commitment to sustainable energy practices.

In conclusion, the partnership extension between Sempra and ConocoPhillips signifies a robust commitment to bolstering energy security and advancing economic opportunities through strategic LNG projects. As global energy demands evolve, this collaboration is poised to play a critical role in reshaping the energy landscape.