Units of liquefied natural gas (LNG) project partners Sempra Energy and Woodside Petroleum Ltd. on Thursday said they have a prospective Korean customer for their proposed export facility at Port Arthur, TX.
The U.S.-Australian pair inked a nonbinding memorandum of understanding (MOU) with Korea Gas Corp. (KOGAS). The MOU with Sempra LNG & Midstream LLC and Woodside Energy (USA) Inc. provides a framework for “cooperation and joint discussion” with KOGAS regarding key aspects of the LNG project, which applied for a construction permit to FERC late last year. The MOU was among several agreements announced with South Korean companies as South Korean President Moon Jae-in was meeting in Washington with President Trump.
Also last year, Sempra and Woodside units entered into a project development agreement to advance their earlier plans for the development of the Port Arthur LNG complex on property Sempra has owned for more than a decade. The agreement outlined a framework for how Sempra and Woodside will contribute their experience and share costs related to the development, technical design, permitting and commercial development of the export project.
Sempra LNG President Octavio Simoes stressed KOGAS’s global experience and expertise in LNG purchasing and the overall LNG market worldwide. “That complements Sempra’s and Woodside’s extensive natural gas infrastructure development and combined marketing/operational experience” in ongoing efforts to advance the Port Arthur project in the currently saturated global LNG market.
Woodside’s Reinhardt Matisons, executive vice president for marketing, added that KOGAS has also been an investor in LNG as well as a buyer. He said the Port Arthur project backers intend to continue working with prospective buyers like KOGAS “to advance the Port Arthur LNG project.”
The project has gained a U.S. Energy Dept. permit to export gas to countries holding free trade agreements (FTA) with the United States.
The Federal Energy Regulatory Commission application includes two gas liquefaction trains capable of producing, under optimal conditions, 13.5 million metric tons/year of LNG in the aggregate (698 Bcf/year); three LNG storage tanks; natural gas liquids and refrigerant storage; feed gas pre-treatment facilities; two berths and associated marine and loading facilities.
Sempra and Woodside are sharing costs for the development, technical design, permitting and marketing of the project, under their project development agreement.
Port Arthur partners acknowledged that their LNG project faces the usual “risks and uncertainties,” including whether they will be able to obtain all of the regulatory permits and commercial deals needed to move ahead with the project. “The MOU does not commit any party to buy or sell LNG or otherwise participate in the Port Arthur LNG project,” a project spokesperson said.
Also, an Energy Transfer Partners LP (ETP) subsidiary has secured an MOU with Kogasto consider participating in the Lake Charles LNG Liquefaction Project. Houston-based BG LNG Services LLC, a Royal Dutch Shell plc subsidiary, also is studying the project now underway in Lake Charles, LA. Kogas already has a 20-year sales and purchase agreementwith Cheniere Energy Inc. for LNG supplies from the Sabine Pass Liquefaction facility in Louisiana.
As designed, Lake Charles LNG would use ETP’s existing regasification import facility to accommodate a liquefaction project.
The nonbinding MOU would allow the parties to study the project’s economics, a potential engineering, procurement and construction agreement, and the feasibility of sourcing/marketing U.S. LNG. The 440-acre site is connected to ETP’s Trunkline Gas Pipeline System, a system that runs 2,200-plus miles and interconnects with more than a dozen interstate and intrastate pipelines.
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