Sempra Targets $48 Billion 5-Year Capital Spending Plan

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Researched by Industrial Info Resources (Sugar Land, Texas)--Sempra Energy (NYSE:SRE) (San Diego, California) announced a 20% increase in its capital spending plan to $48 billion for 2024 through 2028, with more than 90% of that amount aimed at its regulated power utilities in California and Texas.

Click on the image at right for a Sempra pie chart that breaks down the planned capital expenditures by the company's three business platforms.

The five-year plan includes $24.1 billion for Sempra's regulated power utility business in California, and $19.5 billion for its regulated utility in Texas, namely Oncor Electric Delivery Company LLC.

During the company's fourth-quarter 2023 earnings-related conference call, Trevor Mihalik, group president of Sempra California, noted that California has the highest number of electric vehicles (EVs) in the country and has the largest economy in the U.S., contributing 15% of the country's annual gross domestic product.

Looking to the five-year capital plan, Mihalik said: "On the electric side, we are pursuing safe and reliable infrastructure investments, integrating renewable energy, incorporating battery storage, supporting EV infrastructure and hardening the system against event risks. On our natural gas system, we will continue to modernize our gas network, reduce carbon emissions and make investments in energy infrastructure that support the delivery of cleaner molecules."

Looking to Texas, Oncor Chief Executive Officer Allen Nye said that in 2023, the company built, rebuilt or upgraded approximately 3,200 miles of transmission and distribution (T&D) lines.

"In West Texas alone, we built, rebuilt or upgraded over 650 miles of T&D lines and eight new switching and substations," Nye said. Electrification of the oil and gas industry in West Texas continues at an "impressive pace," he added. "Our Permian Basin reliability plan reliability plan update published by ERCOT earlier this month projects that within 15 years, the total demand in West Texas could increase fourfold from its current 6.5 gigawatts to 26 gigawatts. This growth is expected to support oil and gas production as well as general electrification."

The remaining $4.4 billion of the five-year plan is earmarked for Sempra's Infrastructure platform, which includes liquefied natural gas (LNG) export projects and related pipeline and storage projects, among other things.

Justin Bird, chief executive officer of Sempra Infrastructure, said the company is advancing on the $13 billion Port Arthur LNG Phase 1 project in Texas. The project received a final investment decision in 2023.

"At Port Arthur LNG Phase 1, the next milestone will be to commence structural steel," Bird said.

Completion of Port Arthur LNG Plant Train #1 and Train #2 is planned for mid-2027. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for the Train #1 project report and click here for the Train #2 project report.

While the first phase of the Port Arthur LNG plant was not affected by the U.S. Department of Energy's (DOE) pause on granting LNG export licenses, the same can't be said for Phase 2. The Federal Energy Regulatory Commission (FERC) approved Port Arthur Phase 2 in September, but the development is subject to the DOE permitting pause because it has yet to receive a permit to export LNG to non-Free Trade Agreement (FTA) countries. Subscribers can click here for a project report for Train #3 and click here for a report on Train #4.

For more on the DOE pause, see February 1, 2024, article - Will Biden's Pause on LNG Terminal Permitting Upend IEA Forecast of Global Demand Growth for Gas in 2024?

Subscribers can click here for all project reports mentioned in this article and click here for the related plant profile.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).