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ConocoPhillips to take 30% stake in

Port Arthur LNG

PROJECTS CONOCOPHILLIPS has entered into a heads of Poland’s PGNiG terminated its sale and purchase
agreement (HoA) to acquire a 30% stake in Sem- agreement (SPA) for 2mn tpy of supply from Port
pra’s proposed Port Arthur LNG export project Arthur. However, it also signed a memorandum
in Texas, it emerged this week. According to a of understanding (MoU) that would allow it to
statement from the companies, ConocoPhillips buy the volumes originally contracted from the
has also agreed to buy 5mn tonnes per year (tpy) project from other facilities in Sempra’s LNG
of LNG output from the project. portfolio instead. At the time, PGNiG cited
The costs involved in the transaction have not delays to the development of Port Arthur as the
been disclosed. reason behind its decision.
The first phase of the Port Arthur LNG pro- However, market conditions have changed
ject is set to have a production capacity of 13.5mn dramatically since then owing to the war in
tonnes per year (tpy) of LNG. ConocoPhillips Ukraine and intensifying competition for LNG.
will also have the option to acquire equity and In May this year, Sempra and PGNiG signed a
offtake from Phase 2, which is also under devel- new HoA covering supply of LNG volumes from
opment at the Port Arthur site and would be of both a future expansion of Sempra’s Cameron
similar size to the first phase, according to the LNG project in Louisiana and also from Port
statement. Arthur. That HoA only covers the supply of 1mn
The fact that plans for a second phase of Port tpy from Port Arthur, as well as 2mn tpy from
Arthur LNG are now under development rep- Cameron LNG Phase 2, but allows for volumes
resent a significant turnaround for the project, to be reallocated from Cameron to Port Arthur.
whose future previously looked less certain. In While the new deals with PGNiG and Cono-
mid-2021, Saudi Aramco pulled out of talks to coPhillips still need to be finalised, they take
acquire a 25% stake in the project and 5mn tpy Sempra a step closer to a final investment deci-
of offtake from the terminal. Shortly thereafter, sion (FID) on Port Arthur.™

P14 www. NEWSBASE .com Week 28 15•July•2022