Saudi Aramco signs preliminary agreement to buy LNG from Sempra Energy

Saudi Aramco has signed a heads of agreement (HOA) with Sempra Energy to purchase liquefied natural gas (LNG) from Phase 1 of the Port Arthur LNG export project under development in Jefferson County, Texas, US.

The agreement sets the stage for the parties to negotiate and finalise a definitive 20-year LNG sale-and-purchase agreement (SPA).

If a deal is confirmed, Sempra will supply five million tonnes per annum (Mtpa) of LNG to Saudi Aramco, which will also make a 25% equity investment in the first phase of the Port Arthur LNG export terminal.

Saudi Aramco CEO and president Amin Nasser said: “The agreement with Sempra LNG is a major step forward in Saudi Aramco’s long-term strategy to become a leading global LNG player.

“With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500 million metric tons a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships, which enable us to meet rising global demand for LNG.”

During Phase 1, the Port Arthur LNG project will include two liquefaction trains with a combined processing capacity of around 11Mtpa of LNG.

The facility will also have up to three LNG storage tanks and associated facilities.

The project has the potential for the addition of up to six more liquefaction trains or around 45Mtpa of capacity.

Through the Port Arthur project, Sempra aims to export 45Mtpa of clean natural gas to the global LNG market.

Sempra Energy chairman and CEO Jeffrey Martin said: “We are pleased to partner with affiliates of Saudi Aramco, the largest oil and gas company in the world, to advance the development of Sempra LNG’s natural gas liquefaction facility in Texas and enable the export of American natural gas to global markets.”

In February, the company secured the final environmental impact statement from FERC to build the export terminal.

Last month, the regulator gave the approval to site, construct and operate the liquefaction export facility and associated natural gas pipelines.