Sempra Energy and the Polish Oil & Gas Co. firmed up a 20-year sale-and-purchase agreement for liquefied natural gas (LNG) from the Port Arthur LNG liquefaction-export facility under development in Jefferson County, Texas.

In June, the Polish company agreed to basic terms around the long-term export deal.

Financial terms of the latest agreement were not disclosed. The agreement is for the sale and purchase of 2 million tonnes per annum (Mtpa) of LNG, or around 2.7 billion cubic meters per year after regasification. The supply could meet about 15% of Poland's daily needs.

The agreement is subject to certain conditions, including Port Arthur LNG, the Sempra business unit backing the project, making a final investment decision.

If built, the Port Arthur liquefaction-export facility would include two natural gas liquefaction trains capable of processing approximately 11 Mtpa of LNG, up to three LNG storage tanks, two marine berths and associated facilities.

Under the agreement, LNG purchases from Port Arthur LNG would be made on a free-on-board basis, with the Polish energy company responsible for shipping the LNG from Port Arthur to its final destination. Port Arthur LNG will manage gas pipeline transportation, liquefaction processing and cargo loading. The Polish company may use the gas for domestic purposes or trade it in international markets.

Previous Developments

Sempra Energy signed a memorandum of understanding (MOU) with Korea Gas Corp. in 2017 for potential participation in the Port Arthur LNG project.

Sempra Energy has partnered with Mitsubishi, Mitsui & Co. Ltd. and Total S.A. to build the Cameron LNG liquefaction-export project in Hackberry, Louisiana. The first phase of this project is being commissioned and LNG is expected to be produced from three liquefaction trains in 2019.

Sempra also has an MOU with Total S.A. for some export capacity at Cameron LNG Phase 2 and heads of agreements (HOAs) with Mitsui & Co. Ltd., Tokyo Gas Co. and Total S.A. for all of the export capacity at Energía Costa Azul Phase 1 in Baja California, Mexico. An MOU and HOA define terms and conditions of contracts to be negotiated and do not commit any party to enter into a definitive agreement.

The Port Arthur liquefaction-export facility is scheduled to receive its final environmental impact statement from the Federal Energy Regulatory Commission in January. Earlier in 2018, Bechtel was selected by Port Arthur LNG to serve as the engineering, procurement, construction and commissioning contractor for the facility, subject to reaching a definitive agreement.

Sempra said that development of the Port Arthur LNG liquefaction facility hinges on it obtaining additional customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, incentives and other factors, and reaching a final investment decision.