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Sempra Energy’s Port Arthur LNG Phase 1 project is now fully subscribed with long-term offtake agreements, following Wednesday's supply deal with Poland for 1 million tonnes of liquefied natural gas per year.
Poland’s PKN ORLEN, the new owner of Polish Oil & Gas Co, agreed to a 20-year offtake deal with Sempra for 1 million tons per annum of Port Arthur’s Phase 1 LNG.
In 2022, Sempra won similar deals with Germany’s RWE, British INEOS, French ENGIE and ConocoPhillips.
Port Arthur Phase 1 is now fully subscribed with 10.5 million tons per annum under long term offtake contracts.
The deal with Poland comes as Sempra is due to make a final investment decision on Port Arthur this quarter. Assuming the FDI remains on track, Port Arthur is expected to make its first LNG deliveries in 2027.
"We are excited to partner with PKN ORLEN, Central Europe's largest energy group, as they continue to look for long-term, diverse supplies of secure energy sources," Justin Bird, CEO of Sempra Infrastructure, said in a press release.
"With the long-term off-take capacity for Phase 1 now sold under binding agreements, we expect to reach FID later this quarter and commence construction on the Port Arthur LNG Phase 1 project to help meet the increasing demand for LNG across Europe and the rest of the world."
Globally, Energy Intelligence sees LNG ventures adding 70 million tons per year of natural gas reaching FDI this year, boosting long-term energy security.
“This FID outlook is considerably more optimistic than last year’s forecast, partly reflecting long-term foundation supply agreements concluded in 2022. Several other projects advancing commercially could add to this tally,” Energy Intelligence noted in its 2023 outlook, adding that supply agreement announcements have slowed since their peak in the second quarter of last year, with cost pressures mounting.
Energy Intelligence does not expect FID delays to “meaningfully alter” its late-2020s supply outlook; however, the report does warn that “any growing oversupply expectations could slow sanctioning of less-advanced ventures”.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com