) struck a 20-year deal with GDF SUEZ S.A., Mitsubishi
Corporation and Mitsui & Co., Ltd. for the development,
financing and construction of a liquefied natural gas ("LNG")
facility in the Cameron LNG complex in Hackberry, La. The
agreement includes three separate tolling deals worth 4
The combined initiative is subject to final investment
decisions, permit authorizations, financing obligations and
certain other customary conditions. These are expected to take
place in early 2014. The entire program will cost in the range of
$9 billion to $10 billion. Moreover, additional investments in
the band of $6 billion to $7 billion will be directed towards the
Under the agreement, associates of Mitsubishi, Mitsui and GDF
SUEZ will each acquire a 16.6% stake in the current facilities as
well as the LNG complex. Sempra Energy on the other hand will act
as the major operator carrying a 50.2% stake.
The large-scale initiative will involve a 13.5 Mtpa complex
capable of transporting 12 Mtpa or 1.7 billion cubic feet of per
day (Bcf/d) of LNG. It also includes three trains to be used for
freight delivery purposes and regasification capability of 1.5
The construction activities will commence from 2014 with the
first stage of operations anticipated to begin by the latter half
of 2017. Following this, the three trains will fully come online
Sempra Energy stands to benefit twofold from this LNG project
in terms of serving the local La. economy as well as exporting
globally, leading to a positive trade balance. This will also
contribute to strengthening long-term ties with U.S.'s trading
allies. The liquefaction project will turn out to be a key
earnings driver in the future for Sempra Energy.
After penetrating the South American markets, the company's
strategic alliance with Japanese and French majors will bode well
for Sempra Energy's growth objectives. Presently, Sempra Energy
holds a Zacks Rank #2 (Buy).
Other natural gas distribution operators currently performing
Atmos Energy Corp.
Southwest Gas Corp.
Chesapeake Utilities Corporation
). All the above are well-positioned and also carry a Zacks Rank
Based in San Diego, Calif., Sempra Energy together with its
subsidiaries operates as an energy services company. The company
currently has a market capitalization of $20.19 billion.
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