UBS-Midstream Natural Gas Closer Look at Sempras Port Arthur Phase 2 LNG project-20251007

What happended?

In September, Sempra announced it has reached a final investment decision to advance the development, construction, and operation of Port Arthur LNG Phase 2 that will add ~13MTPA of capacity in addition of Phase 1. Incremental project capital expenditures for Phase 2 are estimated at $12Bn, plus an approximate $2Bn payment for shared common facilities (bringing total cost to ~$14Bn), with commercial operations expected in 2030 and 2031 for Trains 3 and 4, respectively. We went through many FERC filings for Port Arthur expansion to get a deeper understanding of this project. We also reviewed the FERC filing for Texas Connector Pipeline and Louisiana Connector Pipeline which will be the primary pipelines to feed gas to the expanded projects.

Project details

This new phase will include two natural gas liquefaction trains, one LNG storage tank and associated facilities with a nameplate capacity of approximately 13MTPA of U.S.-produced LNG. Natural gas would be delivered to the Expansion Project via the commission approved Texas Connector Pipeline. The Expansion Project would involve minor modifications to the previously approved Base Project facilities. The construction area for the new facilities would be entirely located within the previously authorized Base Project site and would not require any new construction infrastructure (i.e., roads or docks) or modifications. Phase 2 is subscribed with long-term offtake under 20-year sales and purchase agreements with strategic partner COP as anchor, and high-quality counterparties EQT, JERA Co. Inc.