Saudi Aramco has signed a non-binding heads of agreement (HoA) with Sempra for a 20-year sale and purchase agreement (SPA) on 5.0 million tonnes per annum (Mtpa) of liquefied natural gas from the Port Arthur LNG Phase 2 expansion project in Texas. Aramco is expected to acquire 25% of the project level equity of Phase 2.

Port Arthur LNG is a natural gas liquefaction and export terminal in Southeast Texas with direct access to the Gulf of Mexico. Phase 1 is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. Phase 2 involves an expansion of the site to include the addition of up to two trains capable of producing up to 13 mtpa. 

Port Arthur LNG has the potential to expand to a total of eight trains, which would position it as one of the world’s most significant LNG export facilities.

“As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy," says Aramco upstream president Nasir K. Al-Naimi. "This agreement is a major step in Aramco’s strategy to become a leading global LNG player.”

Jeffrey W. Martin, Sempra’s chairman and chief executive officer, adds: “The planned expansion of Port Arthur LNG would help facilitate the broad distribution of US natural gas across global energy markets. By expanding the global reach of the Port Arthur LNG facility, we have the opportunity to improve energy security, while providing a lower-carbon alternative to coal for electricity production.”

On June 13, Aramco and NextDecade Corporation announced a non-binding HoA for a 20-year sale and purchase agreement for offtake from Train 4 at the Rio Grande LNG Facility at the Port of Brownsville, Texas.

Under the terms of the HoA, Aramco expects to purchase 1.2 mtpa of LNG for 20 years on a free-on-board basis, at a price indexed to the Henry Hub. Aramco and NextDecade are currently in the process of negotiating a binding agreement, and once executed, its effectiveness will be subject to a positive final investment decision on Train 4.