PORT ARTHUR, Texas — More progress is being made on Sempra Infrastructure's Port Arthur LNG project after an approval from the Jefferson County Commissioners Court.
On Tuesday, commissioners approved and authorized Judge Jeff Branick to execute a Property Tax Agreement between Jefferson County and Port Arthur LNG Phase II LLC (PALNG2) for phase 2 of the Sempra facility within the Port Arthur LNG Reinvestment Zone pursuant.
Sempra announced July 2022 that its subsidiary, Sempra Infrastructure, and ConocoPhillips have entered into a new agreement to develop the Port Arthur LNG (PALNG) project.
This project will bring new job opportunities and economic growth to Southeast Texas, something Pct. 3 Commissioner Michael Sinegal is excited for.
"Because of the jobs they bring as well as the economic impact they're having that's pretty much isolated us from some of the recession that other counties and states are even having," he said.
The Phase 2 Expansion Project is expected to increase Port Arthur LNG’s export capability to a total aggregate of approximately 27 million tonnes per annum (MTPA), according to the project's website.
Liquid natural gas produced from phase 2 will be stored and exported using storage tanks and marine facilities approved as part of the Port Arthur LNG Phase I.
This phase will help meet future demand for LNG supplies in the U.S. expected to serve European, Asian and other global markets, according to their website.
Judge Branick tells 12News he's excited for the massive investment in the region.
"I've said many times before, if Louisiana and other parts of the state of Texas were not engaging in economic development through the use of tax abatements, then we would not be doing it either," Branick said.
Branick says this tax incentive will attract business to the area.
"We consider those incentives for the creation of thousands of construction jobs and hundreds of full time jobs in our community, and that's done under the Texas property tax code," he said.
Sinegal believes this area is perfect for the project.
"Yeah well, you know we have rail, we have air, we have water. We have everything, so this is one of the most attractive areas in the United States if not the world," Sinegal said.
On March 30, 2023, Sempra Infrastructure Partners reached a positive final investment decision (FID) for the development, construction and operation of the Port Arthur LNG Phase 1 project.
The closing deal of $6.8 billion non-recourse debt financing would allow the project's engineering, procurement and construction agreement to proceed, according to a news release from Sempra Infrastructure. The agreement creates the framework to build the PALNG along Highway 87, between Port Arthur and Sabine Pass.
Because of this new partnership, Port Arthur will become a key player in the liquified natural gas industry, which is a hot commodity right now due to U.S. exports being shipped on tankers to Europe.
ConocoPhillips has agreed to have a 30% stake in PALNG, which will help pay for infrastructure improvements and eventually, increase production.
Governor Greg Abbott says the decision to make Port Arthur the location for a new natural liquefication and export terminal will further solidify Texas as the energy capital of the world.
"With a highly skilled workforce and business-friendly climate, and as a national leader in LNG exports, Texas is the prime location to expand LNG operations to unleash the United States' full economic potential in such a critical industry," Abbott said in the release. "Expanding LNG is imperative to American energy security, and the State of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans."
Sempra executives hope this 20-year partnership will give the world's energy supply a much needed boost.
Sempra Infrastructure President Dan Brouillette previously said the Port Arthur facility was hand-picked for this investment, due to the community and strong labor force.
"It's one of the best in the country, so it's a very good place to do business. Texas is a great place to do business, so that's very, very attractive for us. The second part is it's proximity for the Gulf of Mexico," Brouillette said.
Total capital expenditures for the Port Arthur Phase 1 project are estimated at $13 billion, according to the release.