EQT to buy LNG from Sempra's Port Arthur Phase 2 project

By Katha Kalia

Aug 27 (Reuters) - A unit of U.S. energy company Sempra SRE.N will supply 2 million tonnes per annum (Mtpa) of liquefied natural gas from the Port Arthur LNG Phase 2 development project to EQT Corp EQT.N for 20 years, the companies said on Wednesday.

Commercial activity in the U.S. LNG sector has been increasing rapidly after President Donald Trump lifted a moratorium on new liquefied natural gas export permits soon after taking office in January.

Sempra expects to make a final investment decision on the project in 2025. LNG companies typically take the call once they have secured enough supply deals to obtain the necessary financing for construction of the project.

The deal with EQT comes a week after Sempra agreed to supply ConocoPhillips COP.N with 4 mtpa of the superchilled fuel from its Port Arthur LNG Phase 2 project in Texas.

In July, the company signed a deal with Japan's biggest power generator JERA to supply 1.5 million tonnes of LNG, after the project secured U.S. approval to export to markets in Europe and Asia.

"The agreement provides EQT cash flow diversification and an embedded hedge to low Henry Hub prices, which would make U.S. LNG more attractive to international buyers," said Texas Capital Securities analysts.

It also gives EQT exposure to growing international power demand as U.S. LNG is a cheaper source of electricity than wholesale prices in Europe, the analysts said.