San Diego Business Journal

Sempra Signs Agreements for LNG Export Plant

Wednesday, May 29, 2013

Sempra Energy, parent of San Diego Gas & Electric and other subsidiaries, said it signed a 20-year tolling capacity and joint venture agreements for the development and operation of a liquefied natural gas export plant in Louisiana.

Sempra’s three partners in the $10 billion project known as Cameron LNG are GDF Suez SA, Mitsubishi Corp., and Mitsui & Co. Ltd. The three partner entities will each have a 16.6 percent equity in the project while a Sempra entity will retain 50.2 percent, Sempra said.

Once the project is fully completed and operational, it’s expected to produce about 1.7 billion cubic feet of gas daily. The tolling capacity and joint venture agreements are subject to final investment decisions by each party, final permitting, and securing financing commitments, all of which are expected to occur by early 2014.

Construction is expected to start in 2014 with the first phase of operations to begin by the second half of 2017. Full operation is expected by 2018.

Sempra said the project will cost about $6 billion to $7 billion, but with capital financing costs it’s going to run $9 billion to $10 billion.

The latest tolling and joint venture agreements represent a major step for the project, one of the largest in Sempra’s history. Not only is it providing economic benefits to Louisiana, it will also contribute to a more favorable balance of trade for the nation, and supports national and international energy security, said Mark Snell, president of Sempra Energy.

— SDBJ Staff Report