Bechtel Bags EPC Contract for Port Arthur LNG

Engineering firm Bechtel (Reston, Virginia) notched another win in the U.S. liquefied natural gas (LNG) sector by nabbing a contract to help with engineering work for the second phase of the Port Arthur export facility.

A subsidiary of Sempra Energy (NYSE:SRE) (San Diego, California) on Tuesday gave Bechtel's energy division the engineering, procurement and construction (EPC) contract for Phase 2 at Port Arthur.

"We are excited for the opportunity to advance our partnership with Sempra Infrastructure on the Port Arthur LNG Phase 2 project, a vital project that will play a crucial role in meeting the world's increasing need for cleaner and more reliable energy," said Paul Marsden, the president of Bechtel Energy.

Phase 2 already has regulatory approval from the U.S. Federal Energy Regulatory Commission (FERC) to proceed. It would consist of two trains--or liquefaction terminals--that could combine to double the plant's planned capacity to reach 26 million tons per year (Mtpa) in product.

Construction on the first phase is already under way, representing a $13 billion investment from Sempra and its partners at ConocoPhillips (NYSE:COP) (Houston, Texas). Phase 1 is designed to include two liquefaction trains and two storage tanks.

Sempra already has offtake agreements for Phase 2. The company signed a 20-year agreement with Saudi Aramco (Dhahran, Saudi Arabia) to deliver 5 Mtpa from the facility. The Saudi company would also make a 25% equity investment in the planned addition.

Early this year, Sempra unveiled a 20% increase in its capital spending plan to $48 billion for 2024 through 2028.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for the Port Arthur LNG project reports.

The agreement at Port Arthur, meanwhile, follows Bechtel's completion of the foundations for the compressors at Tellurian Incorporated's (NYSE:TELL) (Houston) planned Driftwood LNG export facility in Louisiana.

Australian energy company Woodside Energy Group (NYSE:WDS) (Perth, Australia) on Monday made an all-stock offer for Tellurian, with a value of roughly $900 million. Building on its LNG portfolio in the Australian market, Woodside would also acquire a stake in the Driftwood LNG export facility under construction on the U.S. Gulf Coast.

Tellurian in 2022 secured the permits necessary for the start of construction at the $15.5 billion Driftwood facility. Subscribers can learn more from a plant profile and click here for a list of detailed project reports.

The United States is the world leader in LNG exports, supported in large part by the vast reserves of natural gas located in the shale basins in the Lower 48 states. The federal government expects total LNG exports to increase by 16% from current levels by 2025.

The U.S. LNG sector, however, is exposed to increased weather threats. The Freeport LNG facility was knocked offline on July 7 as Hurricane Beryl approached the Texas coast and operations began to ramp up only last week.

The Institute for Energy Economics and Financial Analysis, meanwhile, said that new facilities coming onstream after 2025 face something of a slump in demand as the market balances out.

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