May 09, 2024 [LNG Prime]- US LNG exporter Sempra said that construction of the first phase of its Energia Costa Azul LNG export project in Mexico is now over 80 percent complete, and the facility “remains on track” to start commercial operations in summer 2025.
Sempra Infrastructure, a unit of Sempra, and France’s TotalEnergies are adding natural gas liquefaction capabilities to the existing ECA LNG regasification terminal, located north of Ensenada in Baja California.
The partners took FID on the development back in 2020, and ECA LNG Phase 1 includes a single-train liquefaction facility with a nameplate capacity of 3.25 Mtpa of LNG.
TotalEnergies and Mitsui & Co will offtake a combined 2.5 Mtpa of LNG from the facility under 20-year deals.
Sempra initially accepted to launch the LNG terminal in 2024.
“They’re seeing solid progress on construction at both ECA Phase 1 and Port Arthur Phase 1. I’ve had opportunities to visit both sites recently,”Justin Bird, CEO of Sempra infrastructure, said during Sempra’s first quarter earnings call on Tuesday.
“At ECA Phase 1, they remain on track for COD in the summer of 2025. They’re now more than 80 percent complete. Construction is going across all areas of the project. They have about 4,000 people deployed on-site and have over 15 million hours worked with no lost-time incidents,” he said.
Besides the first phase, Sempra is also planning to build ECA Phase 2 and the Vista Pacifico LNG terminal in Mexico.
Port Arthur LNG
Sempra Infrastructure and compatriot engineering and construction firm Bechtel are also moving forward with construction on the first phase of the Port Arthur LNG export project in Texas worth about $13 billion.
The company recently provided a construction update on the project.
Bird said that Port Arthur Phase 1 construction activities “are progressing well”.
“They’re focused on the foundation stage construction, soil stabilization piling, concrete pouring, and it’s exciting to see they recently commenced structural steel,” he said.
Sempra Infrastructure took a final investment decision in March last year for the first phase of its Port Arthur LNG export project.
The first phase of the project is fully subscribed with 10.5 Mtpa under binding long-term agreements.
Sempra Infrastructure entered into long-term agreements with each of ConocoPhillips, Ineos, Engie, RWE, and PKN Orlen.
Besides a 20-year LNG SPA for 5 million tonnes of LNG, US energy giant ConocoPhillips is a shareholder in the project with a 30 percent stake.
Last year, Sempra Infrastructure also completed the sale of a 42 percent non-controlling interest in its Port Arthur LNG Phase 1 project to compatriot private equity firm KKR.
Sempra Infrastructure has a controlling 28 percent indirect interest in Phase 1 at the project level.
Train 1 and train 2 COD is expected in 2027 and 2028, respectively, according to Sempra.
Second phase
Besides the first phase, Sempra Infrastructure is also working on the second Porth Arthur LNG phase.
In September last year, Sempra Infrastructure won approval for the US FERC for the proposed Phase 2 project, that includes the addition of two liquefaction trains capable of producing up to 13 mtpa of LNG.
The development of the proposed project could increase the total liquefaction capacity of the facility from some 13 mtpa to about 26 mtpa.
The proposed project would also include an additional LNG storage tank and marine berth and would benefit from some of the common facilities currently under construction that were previously approved as part of the Phase 1 permitting process.
The Biden administration said in January it will pause pending decisions on exports of LNG to non-FTA countries until the Department of Energy can update the underlying analyses for authorizations.
DOE still needs to approve Sempra Infrastructure’s non-FTA application for the second phase of the Port Arthur LNG project.
“In terms of construction contracts or progress at Port Arthur Phase 2, while they’re awaiting their DOE non-FTA export permit, they’re continuing to work with Bechtel on an EPC agreement that can optimize efficiencies with the Phase 1 construction schedule,” Bird said.
“They’re also continuing marketing efforts for offtake and equity,” he said.
Cameron LNG expansion FID in 2025
In March last year, Sempra Infrastructure and its partners TotalEnergies, Mitsui & Co, and Japan LNG Investment, a company held by Mitsubishi Corp and NYK, secured approval from the US FERC for the revised expansion plans for the Cameron LNG export plant in Lousiana.
Cameron LNG, which shipped its 700th LNG cargo in December last year, operates the existing three-train 12 mtpa liquefaction facility and the expansion project includes building the fourth train with a capacity of about 6 mtpa.
Bird said in February that Sempra Infrastructure expects taking an FID on Cameron Phase 2 “as early as the first half of next year”.
Sempra’s CEO Jeff Martinsaid during the call on Tuesday that Sempra still expects FID for Cameron expansion in the first half of 2025.
“They have not yet set an FID expectation for Port Arthur Phase 2,” he said.
Martin also noted during the call that Sempra has about 16 million tons per annum of new LNG export capacity currently under construction, which would more than double its existing LNG operating footprint.
“It’s also important to note that Sempra Infrastructure’s growth forecasts are based solely on projects that have reached FID and are under construction and doesn’t yet include expected upside from a series of other projects still in development,” he said.
“On Cameron Phase 2, they’re currently working with the Cameron partners to optimize cost through value engineering. And as Jeff mentioned, they’re also exploring the procurement or reservation of long lead time and critical path equipment,” Bird said.
“Cameron Phase 2 is a comparatively low emission project and it’s a brownfield asset sourcing low-cost gas. So they think this is really important. And as Jeff had previously mentioned, they’re advancing that with a view toward taking FID in the first half of 2025,” he said.
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