Riyadh – Mubasher: Saudi Aramco’s subsidiary, Aramco Services Company, signed heads of agreement (HOA) with Sempra LNG, a subsidiary of California-headquartered Sempra Energy.

The HOA involves the negotiation and finalisation of a definitive 20-year liquefied natural gas (LNG) sale-and-purchase agreement (SPA) for five million tonnes per annum (Mtpa) of LNG offtake from Phase 1 of the Port Arthur LNG export-project under development, Aramco said in a statement on Wednesday.

The deal also includes the negotiation and finalisation of a 25% equity investment in Phase 1 of Port Arthur LNG. 

“The agreement with Sempra LNG is a major step forward in Saudi Aramco’s long term strategy to become a leading global LNG player,” Amin Nasser, CEO and president of Saudi Aramco, commented on the deal.

He added that the global demand for LNG is expected to increase by 4% per year, exceeding 500 million metric tonnes a year by 2035.

“At Sempra Energy, we are developing one of the largest LNG export infrastructure portfolios in North America, with an eye towards connecting millions of consumers to cleaner, more reliable energy sources,” Jeffrey W. Martin, chairman and CEO of Sempra Energy, said.

Martin noted that the partnership with Aramco will advance the development of Sempra LNG’s natural gas liquefaction facility in Texas and enable the export of American natural gas to global markets.

It is worth noting that Port Arthur LNG is one of Sempra LNG’s five strategically-located LNG development opportunities in North America, and it delivers 45 Mtpa of clean natural gas to the global LNG market.

The proposed Port Arthur LNG Phase 1 project is forecast to comprise two liquefaction trains, up to three LNG storage tanks and associated facilities that should enable the export of approximately 11 Mtpa of LNG on a long-term basis.