Aramco, one of the world’s leading integrated energy and chemicals companies, and Sempra, one of North America’s leading energy infrastructure companies, have announced that their respective subsidiaries have executed a non-binding Heads of Agreement (HoA). The HoA covers a 20-year sale and purchase agreement (SPA) for liquefied natural gas (LNG) offtake of 5 million tonnes per annum (Mtpa) from the Port Arthur LNG Phase 2 expansion project. The HoA further contemplates Aramco’s 25% participation in the project-level equity of Phase 2.
The parties expect to execute a binding LNG SPA and definitive equity agreements with terms substantially equivalent to those in the HoA, with the SPA and equity agreements subject to a number of conditions.
Nasir K. Al-Naimi, Aramco Upstream President, comments: ‘We are excited to take this next step into the LNG sector. 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. This agreement is a major step in Aramco’s strategy to become a leading global LNG player.’
Jeffrey W. Martin, Sempra Chairman and CEO, says: ‘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.’
