Sempra Infrastructure has inked a sales and purchase agreement (SPA) with Engie SA, shoring up offtake for the first phase of its Port Arthur LNG project near Houston and agreeing to source supplies from producers whose gas has been certified by an independent third party.
Sempra could supply France’s Engie 0.875 million metric tons/year (mmty) for 15 years on a free-on-board basis, according to the agreement disclosed Tuesday. Sempra could also lean on its recent partnership with Williams, as Engie stipulated cargoes would come from producers with independent carbon intensity certification processes in place.
As part of the agreement, the firms could also work to further mitigate greenhouse gas emissions from the 13.5 mmty first phase of Port Arthur facility proposed southeast of Houston.
Like other European buyers concerned about meeting stringent environmental targets, Engie has previously shied away from long-term obligations to import U.S. LNG. The company backed out of a tentative agreement for offtake from NextDecade Corp.’s Rio Grande LNG in 2020.
Earlier in the year, after NextDecade took steps to allay environmental concerns, Engie clinched a 15-year SPA for 1.7 mmty from Rio Grande. In March, Engie also agreed to expand an existing SPA with Cheniere Energy Inc.
France has consistently ranked in the lead of the top five destinations for U.S. LNG cargoes this year as it has tried to avoid power outages in the face of multiple issues with its nuclear generation. It received 57.9 Bcf of gas in September, outpacing the UK, Netherlands, Spain and South Korea, according to a report published by the Department of Energy in November.
Sempra has been one of the few U.S. export project developers to land multiple contracts with European firms this year. Earlier in the month, it formalized an offtake agreement with the UK’s Ineos Group Ltd.During a conference call to discuss third quarter earnings in November, management said the company is aiming for a final investment decision in 1Q2023. Sempra estimates first cargo deliveries from Phase 1 of Port Arthur, if it were to proceed, could begin in 2027.
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