Sempra Secures Long-Term LNG Agreement with Petrobras
On September 14, Sempra Energy (NYSE:SRE) announced a 20-year sales and purchase agreement with Petróleo Brasileiro S.A. - Petrobras (NYSE:PBR), securing the supply of approximately 0.8 million tonnes annually of liquefied natural gas from its Port Arthur LNG Phase 2 project in Texas. The facility is under construction, with commercial operations expected to begin for trains 3 and 4 in 2030 and 2031 respectively. This agreement enhances Sempra's visibility into future sales by securing a long-term buyer before the project’s startup. Petrobras becomes the first South American customer of Sempra's infrastructure subsidiary, broadening its geographic reach. The deal covers about 6.2% of Phase 2’s planned annual capacity and supports supply planning while reducing near-term uncertainty in finding buyers. However, earnings from this agreement depend on project execution success and contract economics. Construction remains a significant financial commitment with an estimated $14 billion capital expenditure for the phase. The lack of disclosed pricing formulas or margin details leaves some commercial risk unresolved.
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