More than four years after first being picked as engineering, procurement and construction (EPC) contractor for the proposed new Port Arthur LNG export terminal on the Gulf Coast of Texas, Bechtel and Sempra Infrastructure have agreed a final fixed price: $10.5bn.
If the scheme goes ahead, Bechtel will do detailed engineering, procurement, construction, commissioning, and startup for Phase 1 of the project, which is expected to include two natural gas liquefaction trains capable of producing up to 13.5 million tonnes of LNG a year.
“The execution of the final contract is a critical step in advancing Phase 1 of Port Arthur LNG toward a final investment decision,” said Justin Bird, Sempra Infrastructure chief executive.
He added: “Based on robust customer interest, we know that Port Arthur LNG is highly attractive to the global market”.
With Europe facing an energy crisis resulting from Russia’s invasion of Ukraine, Sempra has already signed non-binding agreements to supply LNG to the Polish Oil & Gas Company, Germany’s RWE Supply & Trading, London-headquartered Ineos Energy, and ConocoPhillips.
Also proposed is a similarly-sized Phase 2 at Port Arthur, which Sempra says is under active marketing and development.
The company has yet to make a final investment decision for either phase. That will require completing necessary commercial agreements, securing permits, and obtaining financing, among other factors.
Sempra first picked Bechtel as EPC contractor for the Port Arthur LNG plant in June 2018.
The two companies then signed a fixed-price EPC contract without disclosing its value in March 2020, before the Covid pandemic disrupted life in the US.
At that time, the companies expected a final investment decision in the third quarter of 2020.
Announcing the latest signing yesterday, Bechtel called the $10.5bn price tag “amended and restated”.