Woodside Energy (USA) Inc. (WUSA), a subsidiary of Australia-based Woodside Energy, entered into a project development agreement (PDA) with San Diego-based Sempra LNG & Midstream concerning the potential Port Arthur LNG natural gas liquefaction facility in Port Arthur, Texas, the two companies said Feb 26.In June 2015, the parties signed a nonbinding memorandum of understanding, and through the PDA they will continue discussing and assessing the project. The PDA allows them to share costs for technical design, permitting and commercial development.

"This agreement continues to build on our experience developing safe, reliable energy infrastructure in North America and on Woodside's core strengths in construction and operation of LNG assets," said Octavio M.C. Simoes, president of Sempra LNG & Midstream. "We are confident that, together, we can develop a facility that will meet the highest standards of LNG supply for the global market."

The Port Arthur LNG project is at a site previously permitted for a LNG regasification terminal east of Houston along the Sabine-Neches Ship Channel. The project will include two liquefaction trains with about 10 million metric tonnes per annum (mtpa). This is about 517 billion cubic feet per year, according to Sempra.

Additionally, a 3-mile portion of Highway 87 between the Intracoastal Waterway and Keith Lake Pass would be relocated and upgraded to accommodate the construction of a marine terminal berth for docking and loading of LNG ships, Sempra said.

Last year, the Department of Energy (DOE) approved Port Arthur LNG to export up to 10 mtpa of domestically produced LNG to all current and future Free Trade Agreement countries; the DOE is currently reviewing the application to export LNG to non-FTA countries.

The project pre-filed with the Federal Energy Regulatory Commission in March 2015, and this process is scheduled to be completed later this year, Sempra said.

Any decision by WUSA to proceed with the project, including establishing a joint venture or partnership with Sempra, remains subject to the completion of further required commercial agreements, acquisition of all necessary permits and approvals, securing financial commitments and achieving other customary conditions. “This opportunity fits well with our focus on building our business in core areas and offering our customers competitive and diverse supply options,” Peter Coleman, CEO of Woodside, said.