- Required offtake capacity for Port Arthur LNG Phase 1 is fully subscribed
HOUSTON, Jan. 25, 2023 /PRNewswire/ -- Sempra Infrastructure, a subsidiary of Sempra (NYSE: SRE) (BMV: SRE), today announced it has entered into a long-term sale and purchase agreement (SPA) with PKN ORLEN S.A., which recently acquired the Polish Oil & Gas Company (PGNiG), for the supply of liquefied natural gas (LNG) from the Port Arthur LNG Phase 1 project under development in Jefferson County, Texas. With this agreement, the projected LNG off-take capacity for the Phase 1 project is now fully subscribed under binding long-term agreements.
Under the SPA, PKN ORLEN has agreed to purchase approximately 1 million tonnes per annum (Mtpa) of LNG from the Port Arthur LNG Phase 1 project on a free-on-board basis for 20 years.
"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," said Justin Bird, CEO of Sempra Infrastructure. "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."
"We are delighted to enter into this long-term agreement with Sempra Infrastructure. This is an important step towards strengthening PKN ORLEN's position as a cornerstone of crude and fuel supply security in Central and Eastern Europe," said Daniel Obajtek, CEO of PKN ORLEN. "Already last year, during a very tense situation on the EU energy market, the United States became one of the main suppliers of natural gas to Poland. By establishing a partnership with Sempra Infrastructure, we are increasing the diversification of our import portfolio and we are securing additional volumes of natural gas, which will be used both to provide for the needs of the Polish customers and to enhance PKN ORLEN's presence in the international energy market."
Sempra Infrastructure has previously announced it has entered into long-term agreements with each of ConocoPhillips, INEOS, ENGIE and RWE for the sale and purchase of LNG from the proposed Phase 1 project. In aggregate, Port Arthur LNG Phase 1 is now fully subscribed with 10.5 Mtpa under binding long-term agreements. The company is focused on completing the remaining steps necessary to achieve its goal of making a final investment decision for the Port Arthur LNG Phase 1 project in the first quarter of 2023, with first cargo deliveries expected in 2027.
The Port Arthur LNG Phase 1 project is permitted and expected to include two natural gas liquefaction trains and LNG storage tanks and associated facilities capable of producing, under optimal conditions, up to approximately 13.5 Mtpa of LNG. A similarly sized Port Arthur LNG Phase 2 project is also competitively positioned and under active marketing and development.
Development of the Port Arthur LNG projects is contingent upon completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors.
About Sempra Infrastructure
Sempra Infrastructure delivers energy for a better world. Through the combined strength of its assets in North America, the company is dedicated to enabling the delivery of cleaner energy for its customers. With a continued focus on sustainability, innovation, world-class safety, championing people, resilient operations and social responsibility, its more than 2,000 employees develop, build and operate clean power, energy networks and LNG and net-zero solutions that are expected to play a crucial role in the energy systems of the future. For more information about Sempra Infrastructure, please visit www.SempraInfrastructure.com and Twitter.
About PKN ORLEN
PKN ORLEN is an integrated, multi-utility company, operating in Central Europe and Canada. It provides energy and fuel to over 100 million of Europeans, while its advanced products are marketed to over 90 countries across 6 continents.
PKN ORLEN pursues strengthening its position of a regional leader in energy transition by implementing clean and sustainable technologies, as well as power generation based on low- and zero-emission sources. The company's actions are driven by a strategic goal of reaching emission neutrality by 2050.
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the date of this press release. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.
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Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include risks and uncertainties relating to: decisions, investigations, regulations, issuances or revocations of permits or other authorizations, and other actions by (i) the U.S. Department of Energy, Comisión Reguladora de Energía, U.S. Federal Energy Regulatory Commission and other governmental and regulatory bodies and (ii) the U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries in which we do business; the success of business development efforts, construction projects and acquisitions and divestitures, including risks in (i) being able to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) realizing anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent or approval of partners or other third parties, including governmental and regulatory bodies; civil and criminal litigation, regulatory inquiries, investigations, arbitrations, property disputes and other proceedings; changes to laws and regulations, including certain of Mexico's laws and rules that impact energy supplier permitting, energy contract rates, the electricity industry generally and the import, export, transport and storage of hydrocarbons; cybersecurity threats, including by state and state-sponsored actors, by ransomware attacks on our systems or the systems of third-parties with which we conduct business, including to the energy grid or other energy infrastructure, all of which have become more pronounced due to recent geopolitical events, such as the war in Ukraine; failure of foreign governments, state-owned entities and our counterparties to honor their contracts and commitments; our ability to borrow money on favorable terms or otherwise and meet our debt service obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook and (ii) rising interest rates and inflation; the impact on our ability to pass through any higher costs to current and future customers due to volatility in inflation, interest and foreign currency exchange rates and commodity prices and our ability to effectively hedge these risks; the impact of energy and climate policies, laws, rules and disclosures, as well as related goals and actions of companies in our industry, including actions to reduce or eliminate reliance on natural gas and the risk of nonrecovery for stranded assets; the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to efficiently incorporate them into our business; weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities or systems, cause the release of harmful materials, cause fires or subject us to liability for damages, fines and penalties, some of which may be disputed or not covered by insurers or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas; the impact of the COVID-19 pandemic on capital projects, regulatory approvals and the execution of our operations; changes in tax and trade policies, laws and regulations, including tariffs, revisions to international trade agreements and sanctions, such as those that have been imposed and that may be imposed in the future in connection with the war in Ukraine, which may increase our costs, reduce our competitiveness, impact our ability to do business with certain counterparties, or impair our ability to resolve trade disputes; and other uncertainties, some of which are difficult to predict and beyond our control.
These risks and uncertainties are further discussed in the reports that Sempra has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on Sempra's website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.
Sempra Infrastructure is not the same company as San Diego Gas & Electric Company or Southern California Gas Company, and neither Sempra Infrastructure nor any of its subsidiaries is regulated by the California Public Utilities Commission.
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SOURCE Sempra Infrastructure
