Page 7 - NorthAmOil Week 14 2022

NorthAmOil COMMENTARY NorthAmOil

Sempra and its partners
are advancing plans to
expand Cameron LNG.

Cameron expansion more rapidly than ever before on securing offtak-
As NFE awaits its necessary regulatory approv- ers for its proposed Rio Grande LNG facility in
als offshore Louisiana, LNG plans are being Texas.
advanced onshore in the state as well. The part- The company announced on April 6 that
ners in the Sempra-led Cameron LNG terminal it had entered into an SPA with a subsidiary
have entered into a heads of agreement (HoA) on of China’s ENN Natural Gas for the supply of
Phase 2 of the project. 1.5mn tpy from Rio Grande over a 20-year
Under the HoA, affiliates of Sempra, TotalEn- period.
ergies, Mitsui & Co. and Japan LNG Invest- Notably, this is the second deal in two weeks
ment – a joint venture between Mitsubishi for both companies. On March 24, NextDec-
and Nippon Yusen Kabushiki Kaisha (NYK) – ade entered into a binding HoA with China’s
would add a fourth train at Cameron, as well as Guangdong Energy Group Natural Gas, also for
increasing capacity of the existing three trains the supply of up to 1.5mn tpy from Rio Grande
through debottlenecking activities. over a 20-year period. And on March 29, Energy
The HoA would see Sempra Infrastructure Transfer said it had entered into two SPAs with
being allocated a 50.2% of the fourth train’s pro- affiliates of ENN for 1.8mn tpy and 900,000 tpy
duction capacity and 25% of projected debot- of LNG over 20 years from its proposed Lake
tlenecking capacity under tolling agreements. Charles LNG export terminal.
The remaining capacity would be allocated “The commercial momentum at [Rio Grande
equally among Cameron LNG’s existing Phase LNG] is accelerating and we believe the com-
1 customers. Sempra intends to sell the LNG pany is well placed to benefit from the strength-
corresponding to its capacity under long-term ening LNG market,” stated NextDecade’s
sale and purchase agreements (SPAs) prior to chairman and CEO, Matt Schatzman.
taking an FID on Phase 2 of Cameron, it said. Indeed, prior to the past two weeks, Next- The offtake deals
The fourth train would have a capacity of Decade only had one other offtaker lined up
6.75mn tpy. Cameron LNG’s existing trains have for Rio Grande LNG, so recent developments involving Chinese
a capacity of 4.5mn tpy each, but this now looks represent significant momentum for the com- companies
set to be expanded. However, Sempra cautioned pany. It is aiming to take an FID on at least two
that the HoA was non-binding and a number trains at Rio Grande in the second half of 2022, illustrate that
of steps still needed to be taken and permits sanctioning its remaining three trains at some
needed to be obtained prior to each of the Cam- point thereafter, and first production is targeted Europe is not
eron LNG partners agreeing to an FID. from 2026.
Sempra also said that Cameron LNG had alone in seeking
awarded two front-end engineering and design What next? more US LNG.
(FEED) contracts to Bechtel Energy and a joint The offtake deals involving Chinese companies
venture between JGC America and Zachry illustrate that Europe is not alone in seeking
Industrial. more US LNG, and that buyers elsewhere in the
“At the conclusion of this competitive FEED world will be all too aware of competition for
process, one contractor is expected to be supplies intensifying.
selected to be the engineering, procurement and If this pace of developments continues – or
construction (EPC) contractor for the project,” even picks up – more announcements on offtake
Sempra said. agreements, FIDs, various regulatory steps and
other moves to advance the next wave of US liq-
Another supply agreement uefaction projects can be expected in the com-
Meanwhile, NextDecade appears to be moving ing weeks and months.™

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