Woodside Petroleum is mulling partnering up with Sempra Energy which would give it direct exposure to a proposed LNG export terminal in Texas.

Under a nonbinding memorandum of understanding with San Diego-based Sempra, the pair will kick off preliminary discussions and due diligence assessments relating to the potential development of Sempra’s LNG facility at Port Arthur.

The Port Arthur liquefaction project is located about 140km east of Houston at a site previously permitted for a LNG regasification terminal.

The proposed project would look to include two natural gas liquefaction trains with a total export capability of about 10 million tons per annum, LNG storage tanks and marine facilities for LNG ship berthing and loading.

In a statement, Woodside said any decision to proceed with a binding agreement, including the establishment of a joint venture or partnership with Sempra, remained subject to further due diligence and necessary internal and external approvals.

Scott Chrisman, Sempra’s vice president of commercial and development, said the company looked forward to discussing the Port Arthur project with Woodside.

“Sempra Energy and Woodside bring together an extraordinary complementary set of experience and skills from two world-class organizations,” he said.

In March, Sempra’s affiliate, Port Arthur LNG, initiated the Federal Energy Regulatory Commission pre-filing review for the proposed facility and filed its permit application with the U.S. Department of Energy for authorization to export LNG produced from the project.

Woodside’s involvement in US LNG to date has been contained to a 20-year agreement to purchase LNG from Cheniere Energy’s Corpus Christi LNG project in Texas.

Shares in Woodside were trading 0.6% lower to $35.45.

Lauren Barrett can be reached at lbarrett@hartenergy.com