Less than two weeks after Sempra Infrastructure received the final federal permit to expand its liquefied natural gas facility already under construction on the Gulf Coast of Texas, the company announced an agreement Wednesday with the biggest power generator in Japan.
Tokyo-based JERA Co. Inc executed a 20-year non-binding agreement to take 1.5 million metric tons per year of liquefied natural gas, or LNG, from the Phase 2 expansion of the Port Arthur LNG project.
Sempra Infrastructure is a subsidiary of Sempra, the Fortune 500 energy company with headquarters in downtown San Diego.
“We are pleased to collaborate with JERA, Japan’s largest power generation company and one of the world’s largest LNG buyers, as they continue to work with the United States to diversify their sources to help strengthen the resilience and dependability of their energy supply,” Sempra Infrastructure CEO Justin Bird said in a statement.
The Port Arthur project on May 29 received authorization from the Department of Energy to export LNG to countries that don’t have free trade agreements with the U.S.
The first phase at Port Arthur is expected to include two liquefaction trains, or production units, capable of producing approximately 13 million metric tons per year of LNG. The expansion plans for the second phase is anticipated to double that amount. The first train is expected to be completed in 2027.
Japan represents one of the largest global markets for LNG and the agreement with Sempra Infrastructure was just one of multiple deals JERA has lined up to meet growing energy demand and expected consumption from data centers hungry to power artificial intelligence.
“We made these decisions because cost-competitive and flexible LNG is essential as we look towards the 2030s,” JERA’s Global CEO, Yukio Kani, told Reuters.
In addition to Port Arthur, JERA also announced separate agreements with three other LNG companies in the U.S. on Wednesday — a heads-of-agreement with Cheniere Marketing and sales and purchase agreements with NextDecade Corporation and Commonwealth LNG.
If completed, the transactions would combine to see JERA buying as much as 5.5 million metric tons of LNG per year and the total value would sur JERA’s cumulative equity investment in the United States, which currently stands at $6 billion.
Established in 2015, JERA supplies about 30% of Japan’s electricity.
In the LNG process, facilities take natural gas, cool it to minus 260 degrees Fahrenheit, load it onto cargo tanks on double-hulled ships and then export it to international destinations.
Environmental groups oppose LNG because of the amount of methane emitted by natural gas. They also say exports extend the world’s reliance on fossil fuels.
Sempra Infrastructure is the majority partner in another project, the $10.5 billion Cameron LNG facility on the coast of Louisiana that opened in August 2020. The company is also adding an export component to an existing LNG terminal near Ensenada, Mexico, called Energía Costa Azul, which is expected to be finished by spring of 2026.
