Sempra and ConocoPhillips sign 20-year LNG agreement for Port Arthur

SAN DIEGO - Sempra (NYSE:SRE) announced Thursday that its subsidiary, Sempra Infrastructure, has signed a 20-year sale and purchase agreement with ConocoPhillips (NYSE:COP), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $118.67 billion, for 4 million tonnes per annum of LNG from the Port Arthur LNG Phase 2 development project in Texas. According to InvestingPro data, ConocoPhillips maintains strong financial health with low price volatility, making it well-positioned for such long-term commitments.

The agreement extends the companies’ existing partnership, which began with Phase 1 of the Port Arthur LNG project where ConocoPhillips holds a 30% equity stake and 5 Mtpa in offtake capacity. The company’s stable financial position is reflected in its moderate debt levels and impressive 55-year track record of consecutive dividend payments, currently yielding 3.29%.

Phase 2 of the project is expected to include two liquefaction trains capable of producing approximately 13 Mtpa of LNG, which would increase the total capacity of the Port Arthur LNG facility to approximately 26 Mtpa.

"The role of U.S. LNG in meeting the energy security needs of America’s allies continues to grow," said Jeffrey W. Martin, chairman and CEO of Sempra, in the press release.

The Port Arthur LNG Phase 2 project has secured major regulatory approvals, including Federal Energy Regulatory Commission approval in September 2023 and U.S. Department of Energy export authorization in May 2025.

In July 2025, Sempra Infrastructure also entered into a 20-year agreement with JERA Co. Inc. for 1.5 Mtpa of LNG offtake from the proposed project.

Bechtel has been selected to handle engineering, procurement and construction of the Phase 2 facility.

Sempra is targeting a final investment decision on Phase 2 in 2025. The company noted that the development remains subject to various factors including completing commercial agreements, maintaining permits, and securing financing.

The agreement represents progress on Sempra’s value creation initiatives for 2025, according to the company’s statement.

In other recent news, ConocoPhillips reported its second-quarter earnings for 2025, surpassing expectations with earnings per share of $1.42, compared to the forecast of $1.38. The company’s revenue also exceeded projections, reaching $15 billion against the anticipated $14.91 billion. Additionally, ConocoPhillips has signed a 20-year agreement to purchase 4 million tonnes per annum of liquefied natural gas from Sempra Infrastructure’s Port Arthur LNG Phase 2 project in Texas. This agreement supports the company’s strategy to deliver natural gas to global markets.

Melius Research initiated coverage on ConocoPhillips with a Hold rating and a price target of $117. Meanwhile, Piper Sandler raised its price target on the company to $124, maintaining an Overweight rating. RBC Capital reiterated its Outperform rating and set a price target of $113, citing an improvement in the company’s organic free cash flow. These recent developments highlight ConocoPhillips’ strategic moves and financial performance.

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