- Provides comprehensive framework to develop Port Arthur
LNG
- Advances broad collaboration on the development of ECA LNG
Phase 2
- Provides for cooperation on associated carbon sequestration
and low-carbon hydrogen opportunities
SAN
DIEGO, July 14, 2022 /PRNewswire/
-- Sempra (NYSE: SRE) (BMV: SRE) today announced that its
subsidiary, Sempra Infrastructure, and ConocoPhillips (NYSE: COP)
have entered into a heads of agreement (HOA) to develop Sempra
Infrastructure's Port Arthur LNG project and jointly participate in
other related energy infrastructure in Southeast Texas and the Pacific Coast of
Mexico.
"At Sempra, we believe bold new partnerships will be central to
solving the world's energy security and decarbonization
challenges," said Jeffrey W. Martin,
chairman and chief executive officer of Sempra. "That is why we are
excited to announce this proposed partnership with ConocoPhillips,
a leading global energy producer that also shares our vision of
responsibly developing and delivering cleaner energy
resources."
"The decision to enter into this agreement with Sempra provides
us with a ground-floor opportunity to participate in premier LNG
developments, reinforcing our commitment to helping solve the
world's energy supply needs as we transition to a lower carbon
future," said Ryan Lance, chairman
and chief executive officer of ConocoPhillips. "Sempra brings a
long history of successful LNG project development, and we look
forward to working together to provide reliable LNG to support the
energy transition and strengthen U.S. and global energy
security."
Today's announcement marks an important milestone with the
substantial completion of the marketing phase of Phase 1 of the
Port Arthur LNG project. The referenced HOA anticipates the
negotiation of a definitive agreement for a 20-year liquefied
natural gas (LNG) tolling arrangement for 5 million tons per annum
(Mtpa) at Phase 1 of the Port Arthur LNG project under development
in Jefferson County, Texas. The
HOA also contemplates a 30% equity investment in Phase 1 of Port
Arthur LNG by ConocoPhillips and the potential for ConocoPhillips
to supply additional natural gas to the proposed facility,
including responsibly sourced natural gas, for the project's other
LNG sales.
In addition to the provisions related to Phase 1 of the project,
ConocoPhillips would have the option to acquire certain LNG offtake
and equity ownership from future developments of the Port Arthur
LNG site, which may include additional LNG trains as well as
low-carbon hydrogen infrastructure. Sempra Infrastructure would
also have the opportunity to participate in carbon capture and
sequestration projects developed by ConocoPhillips in Texas or Louisiana in connection with the Port Arthur
LNG project.
Phase 1 of the Port Arthur LNG project is permitted. The project
is expected to include two natural gas liquefaction trains and LNG
storage tanks, as well as associated facilities capable of
producing, under optimal conditions, up to approximately 13.5 Mtpa
of LNG. Sempra Infrastructure and Bechtel are working on
updating the terms of the project's fixed-price engineering,
procurement and construction contract that was previously announced
in 2020. A similarly sized Phase 2 project is also under active
marketing and development.
Additionally, the HOA provides for collaboration between the two
companies for LNG offtake, natural gas supply and equity investment
for Phase 2 of the ECA LNG export development project in
Baja California, Mexico, including
up to one-third of the exported LNG volumes.
The ECA LNG Phase 2 liquefaction export project is in
early-stage development by Sempra Infrastructure. ECA LNG Phase 1
is currently under construction with first production of LNG by the
3.25-Mtpa facility expected by the end of 2024.
The referenced HOA is a preliminary, non-binding arrangement,
and the development of Sempra Infrastructure's LNG projects remains
subject to a number of risks and uncertainties, including reaching
definitive agreements, securing all necessary permits, signing
engineering and construction contracts, obtaining financing and
incentives and reaching a final investment decision for each
project.
About Sempra
Sempra's mission is to be North America's premier energy infrastructure
company. The Sempra family of companies have 20,000 talented
employees who deliver energy with purpose to nearly 40 million
consumers. With more than $72 billion
in total assets at the end of 2021, the San Diego-based company is the owner of one of
the largest energy networks in North
America helping some of the world's leading economies move
to cleaner sources of energy. The company is helping to advance the
global energy transition through electrification and
decarbonization in the markets it serves, including California, Texas, Mexico
and the LNG export market. Sempra is consistently recognized as a
leader in sustainable business practices and for its long-standing
commitment to building a high-performing culture focused on safety,
workforce development and training, and diversity and inclusion.
Sempra is the only North American utility sector company included
on the Dow Jones Sustainability World Index and was also named one
of the "World's Most Admired Companies" for 2022 by Fortune
Magazine. For additional information about Sempra, please visit
Sempra's website at sempra.com and on Twitter @Sempra.
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 energy transition and
beyond. 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 Sempra Infrastructure's website at
SempraInfrastructure.com and on Twitter @SempraInfra.
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 in any
forward-looking statements. 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.
In this press release, forward-looking statements can be
identified by words such as "believes," "expects," "intends,"
"anticipates," "plans," "estimates," "projects," "forecasts,"
"should," "could," "would," "will," "confident," "may," "can,"
"potential," "possible," "proposed," "in process," "under
construction," "in development," "opportunity," "target,"
"outlook," "maintain," "continue," "goal," "aim," "commit," or
similar expressions, or when we discuss our guidance, priorities,
strategy, goals, vision, mission, opportunities, projections,
intentions or expectations.
Factors, among others, that could cause actual results and
events to differ materially from those described in any
forward-looking statements include risks and uncertainties relating
to: California wildfires,
including the risks that we may be found liable for damages
regardless of fault and that we may not be able to recover all or a
substantial portion of costs from insurance, the wildfire fund
established by California Assembly Bill 1054, in rates from
customers or a combination thereof; decisions, investigations,
regulations, issuances or revocations of permits and other
authorizations, renewals of franchises, and other actions by (i)
the California Public Utilities Commission (CPUC), Comisión
Reguladora de Energía, U.S. Department of Energy, U.S. Federal
Energy Regulatory Commission, Public Utility Commission of
Texas, and other regulatory and
governmental bodies and (ii) states, counties, cities and other
jurisdictions in the U.S., Mexico
and other countries in which we do business; the success of
business development efforts, construction projects and
acquisitions and divestitures, including risks in (i) the ability
to make a final investment decision, (ii) completing construction
projects or other transactions on schedule and budget, (iii) the
ability to realize anticipated benefits from any of these efforts
if completed, and (iv) obtaining the consent or approval of
partners or other third parties, including governmental entities
and regulatory bodies; the resolution of civil and criminal
litigation, regulatory inquiries, investigations and proceedings,
arbitrations, and property disputes, including those related to the
natural gas leak at Southern California Gas Company's (SoCalGas)
Aliso Canyon natural gas storage facility; changes to laws,
including changes to certain of Mexico's laws and rules that impact energy
supplier permitting, energy contract rates, the electricity
industry generally and the ability to import, export, transport and
store hydrocarbons; cybersecurity threats, including by state and
state-sponsored actors, to the energy grid, storage and pipeline
infrastructure, information and systems used to operate our
businesses, and confidentiality of our proprietary information and
personal information of our customers and employees, including
ransomware attacks on our systems and the systems of third-party
vendors and other parties with which we conduct business, all of
which have become more pronounced due to recent geopolitical events
and other uncertainties, such as the war in Ukraine; failure of foreign governments and
state-owned entities to honor their contracts and commitments;
actions by credit rating agencies to downgrade our credit ratings
or to place those ratings on negative outlook and our ability to
borrow on favorable terms and meet our debt service obligations;
the impact of energy and climate policies, legislation, rulemaking
and disclosures, as well as related goals set and actions taken by
companies in our industry, including actions to reduce or eliminate
reliance on natural gas generally and any deterioration of or
increased uncertainty in the political or regulatory environment
for California natural gas
distribution companies 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 timely and economically 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 and systems, cause the release of harmful materials,
cause fires or subject us to liability for property damage or
personal injuries, fines and penalties, some of which may not be
covered by insurance, may be disputed by insurers or may otherwise
not be recoverable through regulatory mechanisms or may impact our
ability to obtain satisfactory levels of affordable insurance; the
availability of electric power and natural gas and natural gas
storage capacity, including disruptions caused by failures in the
transmission grid or limitations on the withdrawal of natural gas
from storage facilities; the impact of the COVID-19 pandemic,
including potential vaccination mandates, on capital projects,
regulatory approvals and the execution of our operations; the
impact at San Diego Gas & Electric Company (SDG&E) on
competitive customer rates and reliability due to the growth in
distributed and local power generation, including from departing
retail load resulting from customers transferring to Community
Choice Aggregation and Direct Access, and the risk of nonrecovery
for stranded assets and contractual obligations; Oncor Electric
Delivery Company LLC's (Oncor) ability to eliminate or reduce its
quarterly dividends due to regulatory and governance requirements
and commitments, including by actions of Oncor's independent
directors or a minority member director; volatility in foreign
currency exchange, inflation and interest rates and commodity
prices, including inflationary pressures in the U.S., and our
ability to effectively hedge these risks and with respect to
inflation and interest rates, the impact on SDG&E's and
SoCalGas' cost of capital and the affordability of customer rates;
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
current or potential counterparties, or impair our ability to
resolve trade disputes; and other uncertainties, some of which may
be difficult to predict and are 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, Sempra Texas, Sempra Texas Utilities,
Oncor and Infraestructura Energética Nova, S.A.P.I. de C.V.
(IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas,
and Sempra Infrastructure, Sempra Texas, Sempra Texas Utilities,
Oncor and IEnova are not regulated by the CPUC.
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SOURCE Sempra