Aramco and North America energy infrastructure company, Sempra have concluded a non-binding Heads of Agreement (HoA) through their respective subsidiaries. This agreement paves the way for a 20-year Sale and Purchase Agreement (SPA) involving the offtake of  5 million tons per annum (mtpa) of liquefied natural gas (LNG) from the Port Arthur LNG Phase 2 expansion project in the US.

The HoA further contemplates Aramco’s 25% participation in the project-level equity of Phase 2, located in the US.

The companies expect to execute a binding LNG SPA and definitive equity agreements with terms substantially equivalent to those in the HoA, with the SPA and equity agreements subject to a number of conditions, Aramco said in a press release on Wednesday.

“We are excited to take this next step into the LNG sector. As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy. This agreement is a major step in Aramco’s strategy to become a leading global LNG player,” said Nasir K. Al-Naimi, Aramco Upstream President.

For his part, Jeffrey W. Martin, Sempra Chairman and CEO, said: “The planned expansion of Port Arthur LNG would help facilitate the broad distribution of US natural gas across global energy markets. By expanding the global reach of the Port Arthur LNG facility, we have the opportunity to improve energy security, while providing a lower-carbon alternative to coal for electricity production.”

Port Arthur LNG is a natural gas liquefaction and export terminal in Southeast Texas with direct access to the Gulf of Mexico. The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities.

The Port Arthur LNG Phase 2 project is a competitively positioned expansion of the site to include the addition of up to two trains capable of producing up to 13 Mtpa.

At the heart of Sempra Infrastructure’s flagship Port Arthur Energy Hub, Port Arthur LNG has potential to expand to a total of eight trains, which would position it as one of the world’s most significant LNG export facilities. The facility is expected to play an important role in enhancing global energy security and resilience.

Moreover, Sempra Infrastructure is actively advancing infrastructure projects within the Port Arthur Energy Hub, addressing both the rising demand for lower-carbon fuels and carbon intensity reduction. This includes the proposed Titan Carbon Sequestration project.