Sempra Infrastructure Announces EPC Contract with Bechtel for Port Arthur LNG Phase 2

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Jul 18, 2024, 07:00 ET

HOUSTON, July 18, 2024 /PRNewswire/ -- Sempra Infrastructure, a subsidiary of Sempra (NYSE: SRE) (BMV: SRE), today announced that Port Arthur LNG Phase 2 and Bechtel Energy (Bechtel) have signed a fixed-price engineering, procurement and construction (EPC) contract for the Port Arthur LNG Phase 2 project under development in Port Arthur, Texas.

"We are thrilled to achieve this milestone with Bechtel for the Port Arthur LNG Phase 2 development project and are confident that our continued collaboration with this world-class construction firm on the Port Arthur site will further strengthen our ability to execute this project," said Justin Bird, CEO of Sempra Infrastructure. "Building on the success of Port Arthur LNG Phase 1, which is currently under construction, the Phase 2 project is expected to further enhance the supply of secure, abundant and reliable U.S. natural gas to customers around the globe."

"We are excited for the opportunity to advance our partnership with Sempra Infrastructure on the Port Arthur LNG Phase 2 project, a vital project that will play a crucial role in meeting the world's increasing need for cleaner and more reliable energy," said Paul Marsden, President of Bechtel Energy. "This partnership positions Bechtel and Sempra Infrastructure to not only deliver a transformative energy infrastructure project but also brings additional significant economic growth and development opportunities to the local community."

As part of the EPC contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing and operator training activities for the project. The scope of the agreement also includes the ability to conduct pre-final investment decision work to better assure project cost and schedule certainty.

The proposed Port Arthur LNG Phase 2 project is competitively positioned and is under active marketing and development. The project received authorization from the Federal Energy Regulatory Commission in September 2023 and is expected to include two liquefaction trains capable of producing approximately 13 Mtpa of LNG, which would increase the total liquefaction capacity of the facility from approximately 13 Mtpa to up to 26 Mtpa.

The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. Construction of the project continues to progress, and the expected commercial operation dates for train 1 and train 2 are 2027 and 2028, respectively.

In June, Sempra Infrastructure and a subsidiary of Aramco signed a non-binding heads of agreement contemplating the purchase of 5 Mtpa of LNG and a 25% equity investment in the Port Arthur LNG Phase 2 project. In December 2022, Port Arthur LNG Phase 2 and INEOS also entered into a non-binding agreement for an offtake capacity of .2 Mtpa from the project.

The development of the Port Arthur LNG Phase 2 project remains subject to a number of risks and uncertainties, including completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors.

About Sempra Infrastructure
Sempra Infrastructure, headquartered in Houston, is focused on delivering energy for a better world by developing, building and operating low carbon solutions, energy networks, and LNG infrastructure that are expected to play a crucial role in the energy systems of the future. Through the combined strength of its assets in North America, Sempra Infrastructure is helping meet changing energy needs and creating access to renewable power and natural gas, while advancing carbon sequestration and clean hydrogen. The company is a recognized industry leader, having received the 2023 World Energy Transition Award at the World LNG Summit. Sempra Infrastructure is a subsidiary of Sempra (NYSE: SRE), a leading North American energy infrastructure company. For more information, visit SempraInfrastructure.com or connect with Sempra Infrastructure on social media @SempraInfra.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise.

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Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: decisions, investigations, inquiries, regulations, denials or revocations of permits, consents, approvals or other authorizations, and other actions, including the failure to honor contracts and commitments, by the (i) U.S. Department of Energy, Comisión Reguladora de Energía, U.S. Federal Energy Regulatory Commission, U.S. Internal Revenue Service and other regulatory bodies and (ii) U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries where we do business; the success of business development efforts, construction projects, acquisitions, divestitures and other significant transactions, including risks related to (i) being able to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) realizing anticipated benefits from any of these efforts if completed, (iv) obtaining third-party consents and approvals and (v) third parties honoring their contracts and commitments; macroeconomic trends or other factors that could change our capital expenditure plans and their potential impact on growth; litigation, arbitrations, property disputes and other proceedings, and changes to laws and regulations, including those related to tax and trade policy and the energy industry in Mexico; cybersecurity threats, including by state and state-sponsored actors, of ransomware or other attacks on our systems or the systems of third parties with which we conduct business, including the energy grid or other energy infrastructure; the availability, uses, sufficiency, and cost of capital resources and our ability to borrow money or otherwise raise capital on favorable terms and meet our obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook, (ii) instability in the capital markets, or (iii) rising interest rates and inflation; the impact on our ability to pass through higher costs to customers due to volatility in inflation, interest and foreign currency exchange rates and commodity prices; the impact of climate and sustainability policies, laws, rules, regulations, trends and required disclosures, including actions to reduce or eliminate reliance on natural gas, the risk of nonrecovery for stranded assets, and uncertainty related to emerging technologies; weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events, such as work stoppages, that disrupt our operations, damage our facilities or systems, cause the release of harmful materials or fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through insurance or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas, including disruptions caused by failures in the pipeline system or limitations on the withdrawal of natural gas from storage facilities; and other uncertainties, some of which are difficult to predict and beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on Sempra's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra Infrastructure and Sempra Infrastructure Partners are not the same company as San Diego Gas & Electric Company or Southern California Gas Company, and none of Sempra Infrastructure, Sempra Infrastructure Partners nor any of its subsidiaries is regulated by the California Public Utilities Commission.

SOURCE Sempra Infrastructure