Williams, Sempra Infrastructure enter HOA for Gulf Coast LNG
By Becky Schultz16 November 2022
Williams, a Tulsa, Okla.-based company operating across the natural gas value chain, has entered into a non-binding heads of agreement (HOA) with North American energy infrastructure company Sempra Infrastructure that establishes elements of an integrated platform to further connect the Haynesville shale basin to liquefied natural gas (LNG) export markets. The HOA is intended to enable the offtake of LNG and development of associated natural gas pipelines to further connect U.S. natural gas supplies in the Gulf Coast region to global demand.
The HOA contemplates negotiation and finalization of two 20-year long-term sale and purchase agreements for approximately 3 million tons per annum (Mtpa) of LNG in the aggregate from Sempra Infrastructure’s Port Arthur LNG project under development in Port Arthur, Texas, and its Cameron LNG Phase 2 project under development in Hackberry, La. The HOA also contemplates the negotiation of a separate natural gas sales agreement for approximately 0.5 billion cubic feet per day (Bcfd) to be delivered in the Gillis, La. area as feed gas supply for the referenced LNG projects.
As part of the proposed transactions, the two companies plan to form a strategic joint venture to own, expand and operate the existing 2.35 Bcfd Cameron Interstate Pipeline that is expected to deliver natural gas to the Cameron LNG Phase 2 site. Additional pipelines are also expected to be owned by the joint venture, including the Louisiana Connector Pipeline expected to deliver natural gas to the Port Arthur LNG facility.
According to Williams, the proposed transactions will complement its recently sanctioned low-carbon Louisiana Energy Gateway (LEG) gathering project. The LEG project, which is expected to go into service in late 2024, will gather 1.8 Bcf/d of natural gas produced in the Haynesville basin.
“Williams is pleased to pursue this strategic transaction with Sempra Infrastructure. We see it as an opportunity to combine our capabilities along the natural gas value chain and increase the delivery of low-carbon, affordable and reliable natural gas from the wellhead to the growing international market,” said Alan Armstrong, president and CEO of Williams.
“Facilitating the delivery of next-generation natural gas to ease energy constraints at home and overseas, while also helping to meet domestic and global climate goals, is central to our natural gas focused strategy,” he continued, “and we look forward to being well aligned with Sempra Infrastructure’s unique capabilities and competitive advantages in the LNG infrastructure space. Coupling our strengths in the midstream infrastructure space will allow us to provide unrivaled access to international markets for our producing customers.”
Justin Bird, CEO of Sempra Infrastructure, said his company is excited to continue advancing its U.S. Gulf Coast LNG and associated pipeline projects as it also strives to help satisfy growing global demand for cleaner, more reliable energy sources. “We look forward to advancing our relationship with Williams,” he added, “a like-minded company that shares our commitment to building a future of energy abundance, affordability and security.”