Sempra Infrastructure will move forward with a project to build a natural-gas export terminal on the U.S. Gulf Coast by early next year, according to people familiar with the matter, potentially adding much-needed supplies of liquefied gas to global markets.
The project is the first phase of Port Arthur LNG, the people said, a roughly $10.5 billion export facility in South Texas that would start delivering cargoes around 2027.
The project will be capable of producing up to about 13.5 million metric tons of LNG a year, according to the company, making it the largest U.S. terminal approved since the war in Ukraine sent Europe scrambling for replacements to Russian gas.
the parent company of Sempra Infrastructure, said Thursday that its affiliate was targeting a final decision on Port Arthur LNG in the first quarter of 2023.
Competition for LNG reached unprecedented levels this year after Russia halted most pipeline gas to Europe, spurring the continent to increase imports of the fuel and giving new momentum to U.S. projects seeking to export a portion of America’s abundant natural gas. The massive export plants, which take years to build, chill the gas to a liquid state so it can be transported by ship.
and Venture Global LNG earlier this year approved two projects to develop export terminals in Texas and Louisiana. Those projects, combined with Port Arthur LNG, will add about 37 million metric tons of LNG a year to global supplies starting in 2025—the equivalent of roughly half the current U.S. export capacity, according to the companies and federal data.
Sempra Infrastructure is completing a 20-year binding agreement to provide oil-and-gas producer
with 5 million metric tons a year of LNG, people familiar with the matter said. ConocoPhillips is expected to take a 30% equity investment in the first phase of the project, they said, an option provided for by a preliminary agreement the two companies announced in July.
The exporter is also in talks to sign a 20-year nonbinding agreement to provide pipeline operator
Williams Co.
with 3 million metric tons a year of LNG out of Port Arthur, according to people familiar with the matter.
ConocoPhillips Chief Executive
Ryan Lance
said earlier this year that the nonbinding agreement it previously signed with Sempra Infrastructure provided the oil-and-gas producer with an opportunity to participate in premier LNG developments. Williams CEO
Alan Armstrong
told investors on Tuesday that he expected higher demand for U.S. LNG exports to drive growth opportunities for the company.
German energy company
RWE AG
, Polish energy company
Polskie Gornictwo Naftowe i Gazownictwo SA
and British chemical company Ineos Ltd. also all signed nonbinding supply agreements with Sempra Infrastructure this year.
Write to Benoît Morenne at benoit.morenne@wsj.com
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