The Rise Of Sempra In LNG Space
Saudi Aramco has signed an agreement to purchase U.S. liquefied natural gas (LNG) from Sempra Energy based in San-Diego. Aramco will purchase 5 million tons per year of LNG for the next 20 years.
“If converted to a sales and purchase agreement (SPA), this will be one of the largest LNG deals ever signed and the largest deal signed since 2013,” said Giles Farrer, research director at energy and minerals consultancy Wood Mackenzie.
This agreement is propelling Sempra to become one of the international players. It also helps Sempra and several other companies to develop new facilities to export LNG. With this agreement Sempra is most likely will secure the authorization to Port Arthur Facility development.
Sempra has struck another deal to sell 2 million tons per year from port Arthur to the Polish Oil and Gas Company. When the deal with Aramco will finalized, Sempra will sell 7 million tons of Port Arthur’s 11 million tons per year capacity.
While Saudi Arabia is looking at diversify their portfolio this new deal could led them to move forward to shift their focus on LNG.
“With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500 million metric tons a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG,” the CEO said.
Aramco has been inquiring partnership and assets in North America, the Russian Arctic and Africa trying to aim for a total of gas production to 23 billion cubic feet per day over the next 10 years.
“With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500 million metric tons a year by 2035, we see significant opportunities in this market and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG,” the CEO said.
Sempra has five LNG development projects in North America including Port Arthur. Cameron LNG facility in Hackberry Louisiana began production earlier this year.
The company goal is to be able to ship 45 million tons of LNG per year around the world.