Sempra Energy and Saudi Aramco ink heads of agreement for 20-year LNG deal

The HOA anticipates the negotiation and finalisation of a definitive 20-year LNG sale-and-purchase agreement for 5mn tonnes per annum of LNG offtake and a 25% equity investment in Phase 1 of Port Arthur LNG

A large part of Saudi Aramco's strategy includes expanding its global natural gas footprint
A large part of Saudi Aramco's strategy includes expanding its global natural gas footprint

Sempra Energy and Saudi Aramco today announced their respective subsidiaries, Sempra LNG and Aramco Services Company, have signed a heads of agreement (HOA). The HOA anticipates the negotiation and finalisation of a definitive 20-year liquefied natural gas (LNG) sale-and-purchase agreement (SPA) for 5mn tonnes per annum (Mtpa) of LNG offtake from Phase 1 of the Port Arthur LNG export-project under development. It also includes the negotiation and finalisation of a 25% equity investment in Phase 1 of Port Arthur LNG. 

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

"At Sempra Energy, we are developing one of the largest LNG export infrastructure portfolios in North America, with an eye towards connecting millions of consumers to cleaner, more reliable energy sources," said Jeffrey W. Martin, chairman and CEO of Sempra Energy. "We are pleased to partner with affiliates of Saudi Aramco, the largest oil & 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."

The proposed Port Arthur LNG Phase 1 project is expected to include two liquefaction trains, up to three LNG storage tanks and associated facilities that should enable the export of approximately 11 Mtpa of LNG on a long-term basis. Port Arthur LNG could be one of the largest LNG export projects in North America, with potential expansion capabilities of up to eight liquefaction trains or approximately 45 Mtpa of capacity.

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Oil & Gas Middle East - August 2019

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