Sempra Infrastructure, a subsidiary of Sempra, has entered into a heads of agreement (HOA) with RWE Supply & Trading, a subsidiary of RWE (RWE: AG), for the purchase of approximately 2.25 million tonnes per annum (Mtpa) of liquefied natural gas (LNG). The LNG is to be supplied on a long-term, free-on-board basis from the Port Arthur LNG Phase 1 project under development in Jefferson County, Texas.
"Sempra Infrastructure's LNG projects are uniquely positioned to help provide U.S. LNG to support the energy security of America's allies in Europe, while also accelerating the transition to a lower carbon future. We are excited about the opportunity to work with one of Germany's top power producers to achieve these dual goals," said Justin Bird, CEO of Sempra Infrastructure. "We see opportunities to work together with RWE across the energy transition, including LNG, hydrogen and renewables. With today's agreement, we make significant progress toward the development of our Port Arthur LNG project and remain committed to lowering greenhouse gas (GHG) emissions across the LNG value chain through the use of new technologies and the improvement of key processes."
Andree Stracke, CEO of RWE Supply & Trading said, "As RWE, we are very pleased to join forces with Sempra Infrastructure. Our partnership can contribute largely to securing significant LNG volumes for the RWE portfolio on a long-term basis while building the basis for supplying low carbon gas in the future."
The HOA contemplates the negotiation and finalization of a definitive 15-year LNG sale and purchase agreement for 2.25 Mtpa to be delivered from the Port Arthur LNG project. Additionally, Sempra Infrastructure and RWE have agreed to work toward a broad framework for the reduction, mitigation, and reporting of GHG emissions associated with deliveries of LNG from the Port Arthur LNG project, including addressing the use of responsibly sourced natural gas as part of the project's feed gas supply and renewable energy as part of the project power mix.
Phase 1 of the Port Arthur LNG project is fully permitted and is expected to include two liquefaction trains and LNG storage tanks, as well as associated facilities capable of producing, under optimal conditions, up to approximately 13.5 Mtpa of LNG.
The referenced HOAs are preliminary, non-binding arrangements, and the development of the Port Arthur LNG project remains subject to a number of risks and uncertainties, including, among others, reaching definitive agreements, maintaining all necessary permits, finalizing engineering and construction arrangements, obtaining financing and incentives, and reaching a final investment decision.
Advancing Lower Carbon LNG with Global Partners
Sempra Infrastructure is one of the top renewable energy producers in Mexico and is currently exceeding its goal of operating its existing LNG infrastructure at a GHG emissions intensity that is 20% below its 2020 baseline, having achieved a 28% reduction in 2021. In addition to continuing to reduce emissions through operational excellence, Sempra Infrastructure is actively developing lower emissions technologies for existing and future infrastructure assets.
Sempra Infrastructure has entered into a memorandum of understanding with Entergy Louisiana, a subsidiary of Entergy Corporation (NYSE: ETR), to develop options to accelerate the deployment of cost-effective renewable energy to power its infrastructure located in vicinity of the Gulf Coast. Additionally, Sempra Infrastructure is developing Hackberry Carbon Sequestration, a proposed carbon sequestration facility located in Southwest Louisiana expected to have the potential to sequester up to 2 Mtpa of carbon dioxide from LNG and other industrial facilities in the region and is developing opportunities to co-locate low-carbon hydrogen production at or near existing Sempra Infrastructure facilities.
In addition to lowering emissions at its own facilities, Sempra Infrastructure is working with other companies to reduce GHG emissions across the U.S. natural gas value chain, consistent with Sempra's aim to have net-zero GHG emissions by 2050. Sempra is a founding member of Veritas, a GTI Energy Differentiated Gas Measurement and Verification Initiative, supporting Sempra Infrastructure and other customers' desires for responsibly sourced natural gas that is produced and transported using proven technologies that minimize GHG emissions. Sempra Infrastructure is also a sponsor of The Collaboratory to Advance Methane Science, a research collaboration to advance technological solutions to enable methane emission reductions.