Australia-based Woodside Petroleum Ltd. will not pursue a partnership with Sempra Energy to develop Sempra’s liquefied natural gas (LNG) terminal in Port Arthur, Texas.
Nevertheless, Sempra (NYSE: SRE) said in a statement that it is “fully committed” to the project, adding that LNG customers may be willing to take equity in the plant. Sempra has lined up customers in South Korea and Poland, and is in discussion with other potential customers. Sempra said it plans to start producing LNG by 2023.
According to Bloomberg News, Woodside had concerns that the project would not provide an adequate return on its investment.
Sempra and Woodside signed a memorandum of understanding in 2015 and a development agreement in 2016. However, by Sempra’s annual investor conference in June, Sempra Energy Chief Operating Officer Joe Householder said it was “probably unlikely that they will invest in us.”
“Sempra LNG & Midstream has been leading the development of the Port Arthur LNG project with Woodside’s collaboration on certain elements,” Sempra said in a statement. “Woodside has been evaluating whether to invest equity in the project, but has recently decided not to pursue that investment further as it wishes to focus on integrated E&P [exploration and production], rather than U.S. Gulf Coast LNG infrastructure investments like Port Arthur LNG.”
Sempra envisions two processing lines on its Port Arthur project. It is one of three LNG facilities Sempra is developing.