Port Arthur LNG Phase 2 Receives Non-FTA Export Authorization

Rhea-AI Summary

Sempra Infrastructure announced that its Port Arthur LNG Phase 2 project received a crucial non-FTA export permit from the U.S. Department of Energy, allowing export of up to 13.5 million tonnes per annum (Mtpa) of LNG to countries without free-trade agreements with the U.S. The Phase 2 project, which received FERC authorization in September 2023, will include two liquefaction trains, potentially doubling the facility's total capacity to 26 Mtpa. In June 2024, Sempra signed a preliminary agreement with Aramco for LNG offtake and equity investment, and selected Bechtel for the EPC contract. Meanwhile, Phase 1 construction continues with expected commercial operations starting in 2027 for train 1 and 2028 for train 2.

Positive

• Received key DOE non-FTA export permit, first since DOE's latest public interest study
• Phase 2 will add 13.5 Mtpa capacity, doubling facility's total capacity to 26 Mtpa
• Preliminary agreement with Aramco for both LNG offtake and equity investment
• Fixed-price EPC contract with Bechtel reduces construction cost uncertainty

Negative

• Project still faces multiple uncertainties including final commercial agreements, permits, and financing
• Phase 1 operations won't start until 2027-2028, indicating long lead time before revenue generation

Insights

Energy Infrastructure Analyst

Sempra secured critical non-FTA export authorization for Port Arthur LNG Phase 2, advancing their 13.5 Mtpa expansion project toward final investment decision.

The U.S. Department of Energy's issuance of a non-FTA export permit to Sempra Infrastructure represents a critical regulatory milestone for the Port Arthur LNG Phase 2 development project. This authorization allows export of up to 13.5 million tonnes per annum (Mtpa) of liquefied natural gas to countries without free trade agreements with the U.S.

The significance of this approval cannot be overstated - it's the first such permit issued following the DOE's most recent public interest study, potentially signaling a positive regulatory environment for U.S. LNG export projects. For Sempra, this authorization removes a major hurdle in their development pathway, complementing their previously secured Federal Energy Regulatory Commission approval from September 2023.

The Phase 2 expansion would double Port Arthur's capacity from 13 Mtpa to approximately 26 Mtpa. Sempra has already made substantial commercial progress, having signed a non-binding heads of agreement with Aramco in June 2024 for both LNG offtake and equity investment. Additionally, they've selected Bechtel for a fixed-price EPC contract, providing important cost certainty in today's volatile construction market.

Phase 1 of Port Arthur LNG is already under construction with targeted commercial operation dates of 2027 and 2028 for its two trains. While this news represents progress, investors should note that several critical steps remain before final investment decision, including finalizing commercial agreements, securing financing, and maintaining necessary permits.

This approval strengthens Sempra's position in the expanding global LNG market, particularly for exports to non-FTA countries like those in Europe and Asia where demand growth potential is substantial. The project's advancement aligns with broader U.S. energy export policy objectives while potentially delivering significant economic benefits across local, state and national levels.

HOUSTON, May 29, 2025 /PRNewswire/ -- Sempra Infrastructure, a subsidiary of Sempra (NYSE: SRE), today announced that the U.S. Department of Energy (DOE) issued a permit to the Port Arthur LNG Phase 2 development project to allow the export of up to approximately 13.5 million tonnes per annum (Mtpa) of U.S.-produced liquefied natural gas (LNG) to countries that do not have a free-trade agreement (FTA) with the U.S. The non-FTA permit, which is the first issued since the completion of the DOE's most recent public interest study, is a major regulatory milestone for the proposed Port Arthur LNG Phase 2 project, which could be a part of helping to narrow the U.S. trade deficit, support the energy security goals of U.S. allies across the globe and strengthen the U.S. economy.

"Today's regulatory approval marks another milestone for the proposed Port Arthur LNG Phase 2 development project, as we make steady progress towards reaching a final investment decision," said Justin Bird, chief executive officer of Sempra Infrastructure. "The project can be a key contributor to further establishing the U.S. as a leader in global energy markets, supporting U.S. trade goals and providing economic opportunity at the local, state and national levels in the U.S."

The Phase 2 project is competitively positioned and is under active marketing and development. The project received authorization from the Federal Energy Regulatory Commission in September 2023 and is expected to include two liquefaction trains capable of producing approximately 13 Mtpa of LNG, which would increase the total liquefaction capacity of the Port Arthur LNG facility from approximately 13 Mtpa for Phase 1, which is currently under construction, to up to approximately 26 Mtpa. Future phases are also in the early development stage.

In June 2024, Sempra Infrastructure and a subsidiary of Aramco signed a non-binding heads of agreement contemplating both a long-term LNG offtake agreement and an equity investment in the Port Arthur LNG Phase 2 project. In July 2024, Sempra Infrastructure announced that Bechtel had been selected for a fixed-price engineering, procurement and construction (EPC) contract for the project.

The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. Construction of the project continues to progress, and the expected commercial operation dates for train 1 and train 2 are 2027 and 2028, respectively.

The development of the Port Arthur LNG Phase 2 project remains subject to a number of risks and uncertainties, including 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, headquartered in Houston, is focused on delivering energy for a better world by developing, building, operating and investing in modern energy infrastructure, such as LNG, energy networks and low-carbon solutions that are expected to play a crucial role in the energy systems of the future. Through the combined strength of its assets in North America, Sempra Infrastructure is connecting customers to safe and reliable energy and advancing energy security. Sempra Infrastructure is a subsidiary of Sempra (NYSE: SRE), a leading North American energy infrastructure company. For more information, visit SempraInfrastructure.com or connect with Sempra Infrastructure on social media @SempraInfra. 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about 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 otherwise.

In this press release, forward-looking statements can be identified by words such as "believe," "expect," "intend," "anticipate," "contemplate," "plan," "estimate," "project," "forecast," "envision," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "in process," "construct," "develop," "opportunity," "preliminary," "initiative," "target," "outlook," "optimistic," "poised," "positioned," "maintain," "continue," "progress," "advance," "goal," "aim," "commit," or similar expressions, or when we discuss our guidance, priorities, strategies, goals, vision, mission, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: decisions, audits, investigations, inquiries, regulations, denials or revocations of permits, consents, approvals or other authorizations, and other actions, including the failure to honor contracts and commitments, by the (i) U.S. Department of Energy, Comisión Nacional de Energía, U.S. Federal Energy Regulatory Commission, U.S. Internal Revenue Service and other regulatory bodies and (ii) U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries where we do business; the success of business development efforts, construction projects, acquisitions, divestitures and other significant transactions, including risks related to (i) being able to make a final investment decision, (ii) negotiating pricing and other terms in definitive contracts, (iii) completing construction projects or other transactions on schedule and budget, (iv) realizing anticipated benefits from any of these efforts if completed, (v) obtaining regulatory and other approvals and (vi) third parties honoring their contracts and commitments; changes to our capital expenditure plans and their potential impact on growth; changes, due to evolving economic, political and other factors, to (i) trade and other foreign policy, including the imposition of tariffs by the U.S. and foreign countries, and (ii) laws and regulations, including those related to tax and the energy industry in the U.S. and Mexico; litigation, arbitration, property disputes and other proceedings; cybersecurity threats, including by state and state-sponsored actors, of ransomware or other attacks on our systems or the systems of third parties with which we conduct business, including the energy grid or other energy infrastructure; the availability, uses, sufficiency, and cost of capital resources and our ability to borrow money or otherwise raise capital on favorable terms and meet our obligations, which can be affected by, among other things, (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook, (ii) instability in the capital markets, and (iii) fluctuating interest rates and inflation; the impact on our ability to pass through higher costs to customers due to volatility in inflation, interest and foreign currency exchange rates and commodity prices and the imposition of tariffs; the impact of climate policies, laws, rules, regulations, trends and required disclosures, including actions to reduce or eliminate reliance on natural gas, the risk of nonrecovery for stranded assets, and uncertainty related to emerging technologies; weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events, such as work stoppages, that disrupt our operations, damage our facilities or systems, cause the release of harmful materials or fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through insurance or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of natural gas, including disruptions caused by failures in the pipeline and storage systems or limitations on the injection and withdrawal of natural gas from storage facilities; 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 and Sempra Infrastructure Partners are not the same company as San Diego Gas & Electric Company or Southern California Gas Company, and none of Sempra Infrastructure, Sempra Infrastructure Partners nor any of its subsidiaries is regulated by the California Public Utilities Commission.

 

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SOURCE Sempra Infrastructure

FAQ

What is the significance of the DOE non-FTA export permit for Sempra's Port Arthur LNG Phase 2?

The permit allows Sempra to export up to 13.5 Mtpa of LNG to countries without free-trade agreements with the U.S., marking a major regulatory milestone and expanding potential market opportunities.

What is the total capacity of Sempra's Port Arthur LNG facility after Phase 2 completion?

After Phase 2 completion, the total liquefaction capacity will increase from 13 Mtpa (Phase 1) to approximately 26 Mtpa.

When will Sempra's Port Arthur LNG Phase 1 begin commercial operations?

Port Arthur LNG Phase 1 is expected to begin commercial operations in 2027 for train 1 and 2028 for train 2.

What is Aramco's involvement in Sempra's Port Arthur LNG Phase 2 project?

Aramco signed a non-binding heads of agreement in June 2024 for potential long-term LNG offtake and equity investment in the Phase 2 project.

Who is the EPC contractor for Sempra's Port Arthur LNG Phase 2?

Bechtel was selected in July 2024 for a fixed-price engineering, procurement and construction (EPC) contract for the Phase 2 project.