Sempra Reaps Profits from Utilities, but Faces Major Setback with Cameron LNG Project

Researched by Industrial Info Resources (Sugar Land, Texas)--Stronger operational performances at its utility and infrastructure businesses took Sempra Energy's (NYSE:SRE) (San Diego, California) second-quarter 2017 earnings up to $259 million, from only $16 million in the same period last year. But the company faced a significant setback on its most closely watched project: an export facility for liquefied natural gas (LNG) on the U.S. Gulf Coast. Industrial Info is tracking more than $21 billion in active projects involving Sempra, including the LNG facility and numerous pipeline and renewable projects.

Sempra announced in a quarterly earnings-related press release that its $10 billion Cameron LNG Liquefaction Plant near Hackberry, Louisiana, likely will have its first liquefaction train delayed until 2019. Two other trains would follow throughout 2019, and no earnings from the project would be expected in 2018. But executives insisted there would not be any material impact on the long-term economics of Cameron LNG, and they anticipate earnings of $300 million to $350 million in 2020. For more information, see Industrial Info's project report.

The full Cameron LNG complex would comprise three 5 million-metric-ton-per-year liquefaction trains, a 160,000-cubic-meter LNG storage tank and related facilities. Last year, it 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. Completion for the first train, originally set for March 2018, already had been pushed back to the middle of this year due to construction-related delays, but is now being pushed further back "based on several factors."

Capital expenditures for the quarter stood at $848 million, compared with $1.05 billion in second-quarter 2016.

San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCalGas), both utilities owned by Sempra, reported significantly stronger earnings during the second quarter, when compared with the same period last year. (Both paid out heavy after-tax refunds to ratepayers in second-quarter 2016.) SDG&E is proposing two major projects for the Marine Corps Air Station Miramar in San Diego: a $45 million battery storage system, which would have a 30-MW capacity, and the $75 million pipeline from Rainbow, California, which would carry up to 200 million standard cubic feet per day of natural gas to the station, passing through a $15 million compressor station in Fallbrook. For more information, see Industrial Info's project reports on the battery storage system, Rainbow pipeline and compressor station.

Solar-power assets placed into service last year helped to nearly double subsidiary Sempra Renewables' earnings to $23 million. Construction is under way on Sempra's $170 million Apple Blossom Windfarm in Bad Axe, Michigan, which is expected to wrap up toward the end of the year. The facility will generate 98.6 MW from 29 Vestas turbines, each with a capacity of 3.4 MW. Sempra also has proposed an $80 million addition to the Auwahi Windfarm in Kula, Hawaii, which would add 40 MW via 20 steel towers, each with a 2-MW turbine. For more information, see Industrial Info's project reports on the Apple Blossom and Auwahi windfarms.

A $47 million impairment Sempra recorded on the Termoélectrica de Mexicali power plant, a combined-cycle, gas-turbine facility, resulted in a net loss of $9 million for the Sempra Mexico subsidiary. The plant is being held for sale. But Sempra made progress on two Mexican solar projects during the quarter: 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. Both have moved from the design to the purchasing stage, with the Rumorosa project ahead of schedule. For more information, see Industrial Info's project reports on the Aquascalientes and Baja California facilities.

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/.