Sempra advances Port Arthur LNG Phase 2 with FID, $14 billion investment

Sempra Infrastructure Partners has taken final investment decision (FID) to advance development, construction, and operation of Port Arthur LNG Phase 2, under development in Port Arthur, Tex. 

Port Arthur LNG, through Phases 1 and 2, is designed to include four natural gas liquefaction trains, three LNG storage tanks and associated infrastructure with nameplate capacity of about 26 million tonnes/year (tpy).

Phase 2 includes two natural gas liquefaction trains, one LNG storage tank, and associated infrastructure with a combined nameplate capacity of about 13 million tpy. The project  represents incremental capital expenditures of $12 billion, plus an additional $2 billion for shared common infrastructure, the company said. Commercial operations are expected to begin in 2030 for Train 3 and 2031 for Train 4.

Funding for Phase 2 is supported by an equity investment led by Blackstone Credit & Insurance, joined by KKR, Apollo-managed funds, and private credit at Goldman Sachs Alternatives. The investor group has acquired a 49.9% minority equity interest for $7 billion, while Sempra Infrastructure Partners retains a 50.1% majority stake in the project.

Port Arthur Phase 2 has secured long-term offtake agreements under 20-year sales and purchase contracts with ConocoPhillips as anchor customer, as well as EQT, JERA Co. Inc., and Sempra Infrastructure Partners.

Engineering, procurement, and construction have been awarded to Bechtel Energy Inc., which has received full notice to proceed. Bechtel’s continued involvement from Phase 1 into Phase 2 is expected to drive cost efficiencies and help mitigate execution risk, Sempra said.

Sempra sells majority interest

Sempra noted movement in its plan to transition to a US utility growth business through the sale of a 45% stake in Sempra Infrastructure Partners to affilates of investment firm KKR with Canada Pension Plan Investment Board (CPP Investments), for $10 billion in proceeds.

In its own release Sept. 23, CPP Investments said it agreed to acquire an approximate 13% indirect equity interest in Sempra Infrastructure Partners from Sempra for about $3.0 billion.   

Upon closing, expected mid-2026 subject to regulatory and other approvals, a KKR-led consortium will become the majority owner of Sempra Infrastructure Partners, holding a 65% equity stake, while Sempra will retain a 25% interest alongside Abu Dhabi Investment Authority's (ADIA) existing 10% stake, KKR said in its release Sept. 23.