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Sempra will build $13B LNG facility in Port Arthur

March 20, 2023

Sempra said Monday that it will move ahead with construction of a $13 billion liquefied natural gas facility in East Texas, becoming the second company to reach a final investment decision on a Gulf Coast LNG facility in as many weeks.

Sempra Infrastructure, a subsidiary of the San Diego-based energy conglomerate, also said it closed its joint venture with Houston-based ConocoPhillips, which agreed to buy more than a third of the Port Arthur LNG project's annual production and a 30 percent stake in the development. KKR, which owns 20 percent of Sempra Infrastructure, also agreed to buy a non-controlling interest in the project, the companies said.

Port Arthur LNG picked up speed in the race to build export terminals late last year, announcing a wave of deals with buyers of the super-cooled gas. It aims to launch the 13.5-million-metric-ton facility in 2027. The Monday announcement follows one last week from Venture Global, which said it would begin to construct its $21 billion phase 2 at its Plaquemines facility in Louisiana. 

"With strong customers, top-tier equity sponsors in ConocoPhillips and KKR and a world class contractor in Bechtel, this project has the potential to become one of America's most significant energy infrastructure investments over time, while creating jobs and spurring continued economic growth across Texas and the Gulf Coast region," Sempra CEO Jeffrey W. Martin said in a statement. 

LNG from the Gulf Coast has played a key role in replacing natural gas in Western Europe, which sought new suppliers after Russia invaded Ukraine. 

"With a highly skilled workforce and business-friendly climate, and as a national leader in LNG exports, Texas is the prime location to expand LNG operations to unleash the United States' full economic potential in such a critical industry," Gov. Greg Abbott said in a statement. "Expanding LNG is imperative to American energy security, and the State of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans."

By Amanda Drane, Houston Chronicle