Sempra LNG and Aramco Services Company sign IPPA for Port Arthur LNG project. Credit: Roy Luck.

Sempra LNG and Aramco Services Company have signed an Interim Project Participation Agreement (IPPA) for the Port Arthur LNG export project in the US state of Texas.

The project is currently under development in Jefferson County.

In May last year, both companies initially signed a heads of agreement (HOA) to purchase five million tonnes per annum (Mtpa) of liquefied natural gas (LNG) from Phase I of the Port Arthur LNG export project. It also involves a 25% equity investment in the first phase of the project.

Sempra Energy chairman and CEO Jeffrey W Martin said: “Today’s announcement is a reflection of the growing alignment between our companies’ interest in the overall success of the Port Arthur LNG project.”

The initial phase of the LNG project is expected to include two liquefaction trains, up to three LNG storage tanks and associated infrastructure to support the export of approximately 11Mtpa of LNG.

Saudi Aramco president and CEO Amin H Nasser said: “The global demand growth for LNG is expected to continue in the coming years, and we see significant opportunities in this market.

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“This agreement with Sempra Energy is another step forward for Saudi Aramco’s long-term gas strategy, and towards becoming the global leading integrated energy and chemicals company.”

Sempra has recently initiated the Federal Energy Regulatory Commission (FERC) pre-filing review for the expansion of two additional liquefaction trains to produce a total LNG capacity of around 22Mtpa.

Through the Port Arthur project, Sempra aims to export 45Mtpa of clean natural gas to the LNG market worldwide.

The participation of each party in the Port Arthur LNG export project remains subject to the execution of the respective agreements and other conditions.

The IPPA aims to help achieve these and some of the other pre-final investment decision activities of the Texas LNG project.