Sempra and Aramco executed a non-binding heads of agreement (HOA) for LNG offtake from the second phase of the Port Arthur LNG (PALNG) project. The HOA also contemplates that Aramco will take a 25% project-level equity in the second phase.

The HOA is for a 20-year sale and purchase agreement (SPA) for 5 million tonnes per annum (mtpa) of LNG offtake, Sempra said in a June 26 press release.

Sempra and Aramco expect to execute a binding LNG SPA and definitive equity agreements with terms substantially equivalent to those in the HOA, with the SPA and equity agreements subject to a number of conditions, Sempra said in the release.

"The planned expansion of Port Arthur LNG would help facilitate the broad distribution of U.S. natural gas across global energy markets,” Sempra Chairman and CEO Jeffrey W. Martin said in the release.

Sempra’s PALNG liquefaction and export terminal is located in Southeast Texas and offers direct access to the U.S. Gulf of Mexico.

PALNG Phase 1 is currently under construction and consists of Trains 1 and 2, as well as two LNG storage tanks and associated facilities. Phase 1 will have a nameplate capacity of 13 mtpa of LNG, according to Sempra.

PALNG Phase 2 is a competitively positioned expansion of the site aiming to add up to two trains that could produce up to 13 mtpa of LNG.

“At the heart of Sempra Infrastructure's flagship Port Arthur Energy Hub, Port Arthur LNG has potential to expand to a total of eight trains, which would position it as one of the world's most significant LNG export facilities,” Sempra said in the release.

"As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world's growing need for lower-carbon sources of energy,” Aramco Upstream President Nasir K. Al-Naimi said in the release.