Sempra Energy Pushes Past Weak Prices to Develop LNG, Renewable Projects, and Eyes Mexico

Researched by Industrial Info Resources (Sugar Land, Texas)--Sempra Energy (NYSE:SRE) (San Diego, California), a leading energy holding company, took a hit in the second quarter from persistently low natural gas prices. The company boosted its second-quarter capital 2016 expenditures to $1.05 billion, a 29% increase from the same period in 2015, and remains optimistic about the liquefied natural gas (LNG) market, despite a global oversupply of the product. Industrial Info's project database is tracking $27.15 billion in active projects involving Sempra, including an increasing number in Mexico.

Sempra's earnings for the first six months of 2016 were $335 million, less than half that of the first six months of 2015. Although the company endured $19 million in after-tax losses that were related to natural gas price movements, Sempra executives expect this trend to reverse by year-end.

The highest-valued project to involve Sempra is the $10 billion Cameron LNG Liquefaction Plant in Hackberry, Louisiana, which is one of the most closely watched projects in the tumultuous natural gas liquids (NGL) market. Sempra plans to build three 5 million-metric-ton-per-year liquefaction trains; a 160,000-cubic-meter LNG storage tank; a construction dock; and a truck-loading rack and storage tanks. Gas will be sourced from the Appalachian Basin. For more information, see Industrial Info's project report.

Sempra also expects to begin construction on two more production trains at the facility next year. According to World Oil, the U.S. Department of Energy (DOE) last month authorized Cameron LNG to export an additional 1.41 billion cubic feet per day from its proposed expansion to countries that do not have a free-trade agreement (FTA) with the U.S. (Sempra had first received approval from the DOE to export to non-FTA countries earlier in the year.) With this order, Cameron LNG's export capacity now will be 24.92 million tonnes per annum, or 3.53 billion cubic feet per day. For more information, see Industrial Info's project report on trains 4 and 5 at Cameron LNG.

Cameron LNG has signed tolling agreements with Engie (formerly GDF Suez) (Paris, France), Mitsubishi Corporation (Tokyo, Japan) and Mitsui & Company Limited (Tokyo) for its total yearly capacity, covering 20 years.

Sempra Energy's Mexican subsidiary, IEnova, is expanding its footprint as well. IEnova is in the early evaluation stages for the $1.5 billion Costa Azul LNG Liquefaction Plant in Ensenada, Baja California. The subsidiary hopes to export natural gas from its existing LNG storage and regasification terminal, but an actual kickoff is at least two years away. For more the most complete information available, see Industrial Info's project report.

Last month, Sempra's U.S. Gas & Power subsidiary announced its acquisition of the $170 million Apple Blossom Windfarm in Bad Axe, Michigan from Geronimo Energy LLC. The project, fully contracted to Consumers Energy, the principal subsidiary of CMS Energy (NYSE:CMS) (Jackson, Michigan), under a 15-year agreement, is expected to be completed toward the end of 2017. According to North American Windpower, the completed project would give Sempra U.S. Gas & Power, along with its affiliates and joint-venture partners, wind facilities in eight states for a total of more than 1.3 GW of generating capacity. For more details, including project specifications and contractor contact information, see Industrial Info's project report.

"With the acquisition of a new windfarm in Michigan, we continue to add new projects, both domestically and internationally, that support our long-term growth strategy," said Debra L. Reed, chairman and chief executive officer of Sempra Energy, in a press release accompanying a quarterly earnings conference call.

Four other renewable-energy projects can be found among Sempra's highest-valued prospects:

$820 million: 375-MW windfarm expansion in La Rumorosa, Mexico
For more details, see Industrial Info's project report.

$600 million: 150-MW solar photovoltaic (PV) expansion in Arlington, Arizona
For more details, see Industrial Info's project report.

$450 million: 243-MW windfarm expansion in La Rumorosa, Mexico
For more details, see Industrial Info's project report.

$400 million: 201-MW windfarm expansion in La Rumorosa, Mexico
For more details, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.