(The Center Square) – Sempra Infrastructure announced Tuesday that it has begun operating the Port Arthur Louisiana Connector pipeline, expanding the regional network linking natural gas producers in Louisiana and Texas to international energy markets.
Through a connection to the company’s Gillis Hub Pipeline near Sulphur, Louisiana, Sempra has created a 2-billion-cubic-feet-per-day supply corridor feeding the Port Arthur export terminal, now under construction about 72 miles away in Texas. The Gillis hub provides salt dome storage for natural gas producers in east Texas and west Louisiana and sits at the center of a regional pipeline distribution system.
Justin Bird, CEO of San Diego-based Sempra Infrastructure, said the 42-inch-diameter pipeline was completed ahead of schedule and below budget at a cost under $1 billion. “This milestone is a key step in Sempra Infrastructure’s progress to advance critical energy infrastructure in the U.S. in order to help meet the world’s growing need for reliable, secure energy,” said Bird.
The Beauregard Compressor Station, a massive 93,880-horsepower installation engineered to maintain the pressure required to move 2 billion cubic feet of gas more than 70 miles across state lines, is located in Ragley, Louisiana, near the Gillis hub.
The Louisiana Connector pipeline will supply Port Arthur export terminal’s Phase 1 buyers, which include Germany’s RWE, the United Kingdom’s INEOS, France’s Engie, and Poland’s PKN Orlen, along with U.S. firm ConocoPhillips, which owns a 30% stake. All of the firms signed long-term contracts.
The new interstate pipeline also connects directly to Sempra’s LA Storage project, a salt dome facility currently under construction to improve the company’s flexibility to deliver gas to industrial buyers and export terminals along the Gulf Coast.
For the Gulf Coast energy sector, the long-term commitments translate into sustained business opportunities for regional industrial contractors, engineering suppliers, and pipeline maintenance companies.
To secure the project, Louisiana officials offered Sempra standard tax abatements of 80% on local property taxes for up to 10 years on qualifying infrastructure investments. Local taxing authorities like schools and police juries will collect the remaining 20% of standard ad valorem revenues during the initial decade of the pipeline’s operational lifespan.
Under current state guidelines, industrial developments of over $500 million can also apply for “Mega-Project” status, potentially increasing local tax exemptions to between 93% and 100% when approved by the Louisiana Board of Commerce and Industry and the governor.
Oil and gas trade groups like the Louisiana Midstream Association maintain that long-term industrial exemptions remain a critical tool for attracting multi-billion-dollar investments away from competing Gulf Coast states.
Sempra Infrastructure expects to achieve commercial operations and begin shipping liquified natural gas from the Port Arthur Phase 1 project in 2027.
Beyond Phase 1, Sempra Infrastructure has already finalized an investment decision for a second expansion phase at Port Arthur that could double the complex’s total capacity to 26 million tons per year. The next expansion is projected to drive further pipeline investments and property tax negotiations in the region through 2030.
