Sempra Invests in California Transmission, Mexican Renewables as Cameron LNG Hits Snag

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Sempra Energy (NYSE:SRE) (San Diego, California) is spending more on key projects in California and Mexico as recovering commodity prices strengthened its bottom line in the first quarter of the year. Still, the company's biggest undertaking, the Cameron LNG Liquefaction Plant in Louisiana, could be looking at a longer completion schedule next year. Industrial Info is tracking more than $21.5 billion in active projects involving Sempra.

Capital expenditures were reported to total $1.05 billion in first-quarter 2017, a 5% increase from the same period last year. The biggest increases were found at San Diego Gas & Electric and Sempra's Mexican subsidiaries.

San Diego Gas & Electric is proposing the South Orange County Reliability Transmission Line Enhancement in California, an upgrade to decades-old lines, poles and substations in the cities of San Juan Capistrano and San Clemente, as well as unincorporated areas of Orange County. The major component is the $450 million San Juan Capistrano-to-Talega enhancement, which would replace four segments, totaling about 7.5 miles, of 138-kilovolt (kV), overhead, single-circuit line with 230-kV, double-circuit line.

The subsidiary also is at work on a new, gas-insulated $25 million substation in San Juan Capistrano, following a $2.5 million demolition and dismantling of the old San Juan Capistrano station, as well as a $3 million modification of the substation in Talega. For more information, see Industrial Info's project reports on the line enhancement, new San Juan Capistrano substation, old substation dismantlement and Talega substation.

IEnova, one of Sempra's Mexican subsidiaries, benefited from higher regulatory earnings from projects in construction, as well as last year's acquisition of the Ventika wind farm complex. Mexico is one of Sempra's top destinations for renewable investments: The company is at work on the $115 million Central Fotovoltaica Pima Solar facility project in Caborca, Sonora, which is expected to begin construction later this year and eventually generate 110 megawatts (MW), and is proposing the $100 million Tepesala Solar II station in Tepezala, Aguascalientes, which is designed to generate 100 MW, and the $50 million Rumorosa Solar station in Tecate, Baja California, which would generate 41 MW. For more information, see Industrial Info's project reports on the Sonora, Aquascalientes and Baja California facilities.

"IEnova recently agreed to construct a solar facility with a 20-year [power-purchase agreement] for 110 megawatts with an industrial steel company," said Jeffrey Walker Martin, the chief financial officer of Sempra Energy, about the Sonora project in a quarterly earnings conference call. "This is the first bilateral agreement in Mexico under the new market for renewables where the off-taker is a private company. We anticipate there'll more opportunities like this."

But Sempra recently announced that its highest-valued project, the $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana, likely will face setbacks as it nears the finish line. The massive complex would comprise three 5 million-metric-ton-per-year liquefaction trains, a 160,000-cubic-meter LNG storage tank and related facilities, and last year received approval from the U.S. Department of Energy to export to countries that do not have a free-trade agreement (FTA) with the U.S. The first train had been slated for completion in March 2018, but a recent spate of construction delays forced executives to acknowledge that startup could be pushed back to the middle of the year, with possible further delays for the other two trains. For more information, see Industrial Info's project report.

"We expect the phased start-up of these three trains in the latter half of next year," said Patrick Mullen, the chief operating officer of Chicago Bridge & Iron Company N.V. (NYSE:CBI) (CB&I) (The Hague, Netherlands), which is serving as the engineering, procurement and construction contractor on Cameron LNG, in a recent quarterly earnings call for CB&I.

Sempra's revenues for the first quarter were reported to be $3.03 billion, a 15.6% increase from first-quarter 2016, while earnings jumped 24.9% to $441 million.

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/.