Sempra LNG, a unit of Sempra Energy has signed a Heads of Agreement (HOA) with Sonatrach S.A., one of the world’s leading energy companies, and is proceeding with detailed negotiations to bring Algerian natural gas to the U.S. Gulf Coast. The negotiations include exploring additional opportunities to market the natural gas in the United States.
The non-binding HOA contemplates a 20-year agreement to import 250 million cubic feet per day (MMcfd) to 500 MMcfd of Algerian liquefied natural gas (LNG) to Sempra LNG’s Cameron LNG receipt terminal under development near Lake Charles, La.
This agreement is an important step to move Algerian natural gas to the U.S. market, as this will reinforce Sonatrach’s position in the Atlantic basin,” said Mohamed Meziane, Sonatrach chief executive officer. “Sempra Energy is a leading natural gas trading and transportation company in the United States and is well qualified to help expand Sonatrach’s presence there.”
LNG is natural gas that has been cooled below minus-260 degrees Fahrenheit and condensed into a liquid. LNG occupies 600 times less volume than in its gaseous state, which allows it to be shipped in cryogenic tankers from remote locations to markets where it is needed. At the receiving terminal, LNG is unloaded and stored until it is vaporized back into natural gas and moved via pipelines to customers.
Algeria is the second largest LNG exporter in the world with an installed capacity of 20 million tonnes. Algeria has 40 years’ experience in the LNG industry and began making deliveries from its Arzew plant in 1964. Future plans include the construction of two new plants with a total capacity of 8.5 million tonnes located in Skikda (4.5 million tonnes) and Arzew (4 million tonnes).