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EQT Signs Long-Term Deal With Sempra for the Purchase of LNG
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Key Takeaways
EQT signed a long-term agreement to purchase 2 mtpa of LNG from Sempra's Port Arthur Phase 2 project.
The LNG will be supplied for 20 years on a free-on-board basis, with pricing tied to Henry Hub.
Sempra targets a 2025 FID on Phase 2, backed by recent supply deals with EQT and ConocoPhillips.
EQT Corporation (EQT - Free Report) , a leading natural gas production company, signed an agreement with Sempra, a U.S.-based energy company, for the purchase of 2 million tons per annum (mtpa) of liquefied natural gas (LNG) from the Port Arthur LNG Phase 2 project. Sempra has not yet reached a final investment decision (FID) on the Port Arthur LNG Phase 2 project. Phase 1 of the LNG project is currently under development.
U.S. LNG Activity Accelerates Following End of Moratorium
The U.S. LNG sector has witnessed a significant rise in commercial activity since January 2025, when president Trump took office. The Trump administration removed the moratorium on new LNG export permits, which boosted the sector and accelerated the construction and development of these projects.
Details of the Agreement
Per the terms of the agreement, Sempra will supply 2 mtpa of LNG on a free-on-board basis to EQT for 20 years. The price of the LNG supplied will be linked to the Henry Hub natural gas index price. This is the second LNG offtake agreement signed in August. Sempra has also signed a long-term LNG offtake deal with ConocoPhillips for the supply of 4 mtpa of natural gas from the Port Arthur LNG Phase 2 project.
Outlook
Port Arthur LNG Phase 1, which is currently under development, includes two liquefaction trains, Train 1 and Train 2. For the first phase, Train 1 is expected to reach commercial operation in 2027, whereas Train 2 is slated to be operational in 2028. Phase 2 of the project involves another two liquefaction units with a production capacity of approximately 13 million tons per year of LNG. This is anticipated to increase the total liquefaction capacity of the LNG project up to 26 million tons per year.
Sempra intends to reach an FID on Phase 2 of the Port Arthur LNG project in 2025. Typically, an FID for such large-scale projects undertaken by LNG developers is reached only when it has secured enough supply agreements. These supply agreements are crucial for financing the construction and development of these facilities. The construction and development of these LNG projects are expected to support the country in maintaining its position as the largest exporter of natural gas.
Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.
Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company’s higher dividend yield, compared to its sub-industry peers, makes it an attractive choice for investors who seek consistent returns.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.
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EQT Signs Long-Term Deal With Sempra for the Purchase of LNG
Key Takeaways
EQT Corporation (EQT - Free Report) , a leading natural gas production company, signed an agreement with Sempra, a U.S.-based energy company, for the purchase of 2 million tons per annum (mtpa) of liquefied natural gas (LNG) from the Port Arthur LNG Phase 2 project. Sempra has not yet reached a final investment decision (FID) on the Port Arthur LNG Phase 2 project. Phase 1 of the LNG project is currently under development.
U.S. LNG Activity Accelerates Following End of Moratorium
The U.S. LNG sector has witnessed a significant rise in commercial activity since January 2025, when president Trump took office. The Trump administration removed the moratorium on new LNG export permits, which boosted the sector and accelerated the construction and development of these projects.
Details of the Agreement
Per the terms of the agreement, Sempra will supply 2 mtpa of LNG on a free-on-board basis to EQT for 20 years. The price of the LNG supplied will be linked to the Henry Hub natural gas index price. This is the second LNG offtake agreement signed in August. Sempra has also signed a long-term LNG offtake deal with ConocoPhillips for the supply of 4 mtpa of natural gas from the Port Arthur LNG Phase 2 project.
Outlook
Port Arthur LNG Phase 1, which is currently under development, includes two liquefaction trains, Train 1 and Train 2. For the first phase, Train 1 is expected to reach commercial operation in 2027, whereas Train 2 is slated to be operational in 2028. Phase 2 of the project involves another two liquefaction units with a production capacity of approximately 13 million tons per year of LNG. This is anticipated to increase the total liquefaction capacity of the LNG project up to 26 million tons per year.
Sempra intends to reach an FID on Phase 2 of the Port Arthur LNG project in 2025. Typically, an FID for such large-scale projects undertaken by LNG developers is reached only when it has secured enough supply agreements. These supply agreements are crucial for financing the construction and development of these facilities. The construction and development of these LNG projects are expected to support the country in maintaining its position as the largest exporter of natural gas.
EQT’s Zacks Rank & Key Picks
Currently, EQT carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Repsol S.A. (REPYY - Free Report) , Antero Midstream Corporation (AM - Free Report) and Galp Energia SGPS SA (GLPEY - Free Report) . While Repsol and Antero Midstream sport a Zacks Rank #1 (Strong Buy) each, Galp Energia carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.
Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company’s higher dividend yield, compared to its sub-industry peers, makes it an attractive choice for investors who seek consistent returns.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.