Sempra Infrastructure and a unit of UK’s Ineos Group Ltd. have inked a long-term sales and purchase agreement (SPA) for 1.4 million metric tons/year (mmty)  of LNG from the proposed Port Arthur export project southeast of Houston. 

The liquefied natural gas arm of San Diego-based Sempra said Ineos agreed to a 20-year SPA, formalizing a tentative agreement earlier in the year. It also confirmed an additional heads of agreement with Ineos to potentially purchase 0.2 mmty from a second phase of the facility planned in Jefferson County.

Ineos, a large industrial gas user and the fourth largest global chemical company, is planning to use its offtake from Port Arthur LNG as an entry point into global gas trading, especially in Europe, according to management. In July, the group signed a contract for regasification capacity at the developing German LNG terminal in Brunsbuettel.

“This long-term contract with Sempra Infrastructure and the agreement of regasification capacity in Brunsbuettel, secures the key areas of the value chain for Ineos across the Atlantic corridor and represents a major step forward in the Ineos Energy journey, at a time of significant transformation in the energy industry,” said Ineos Energy Chairman Brian Gilvary.

The first phase of the Port Arthur terminal, which is fully permitted, may produce up to 13.5 mmty. A second phase, already in the permitting process, could add an additional two trains and boost capacity to roughly 27 mmty.

During a conference call to discuss third quarter earnings in November, management said the company is aiming for a final investment decision (FID) in 1Q2023. In the meantime, Sempra is working to secure financing and may sell equity in the project. Soon thereafter, ConocoPhillips agreed to handle feed gas supply in a combination equity and offtake deal.

Sempra estimates first cargo deliveries from Phase 1 of Port Arthur LNG could begin in 2027.

Sempra Infrastructure CEO Justin Bird told investors last month the company could have more information about Port Arthur’s second phase in early 2023.

Sempra’s tentative agreement with Ineos previously outlined possible offtake from a proposed expansion of its Cameron LNG facility in Louisiana. The company has since indicated an FID for the fourth train could come later in 2023.