Sempra Energy, Mitsui Sign MOU For Development Of LNG Export Projects In North America

SAN DIEGO, Oct. 28, 2019 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today announced that it has entered into a memorandum of understanding (MOU) with Mitsui & Co., LTD. (Mitsui) reflecting the parties' preliminary agreement for Mitsui's participation in the Cameron LNG Phase 2 project in Louisiana, and a future expansion of the Energía Costa Azul (ECA) LNG project in Baja California, Mexico.

"This agreement signals continued momentum in the growing U.S. liquefied natural gas (LNG) export market, while reinforcing the unique competitive advantage that Sempra offers customers seeking LNG export capabilities from the Gulf Coast, as well as the West Coast of North America," said Justin Bird, president of Sempra LNG. "We are pleased to expand our relationship with Mitsui and advance the development of both LNG projects."

"We are pleased to further expand our strategic relationship with Sempra in a broader range of opportunities. This agreement will contribute to expanding Mitsui's uniquely diversified supply portfolio worldwide by utilizing the strengths and capabilities of both companies," said Motoyasu Nozaki, managing officer, chief operating officer of Energy Business Unit II, Mitsui & Co., Ltd. 

The MOU is non-binding and contemplates the continued mutual support for the development of Cameron LNG Phase 2, including Mitsui's purchase of up to one-third of the available capacity of the project, as well as the potential offtake of approximately 1 million tonnes per annum (Mtpa) of LNG and equity participation in a future expansion of ECA LNG.

ECA LNG is being developed with IEnova, Sempra's subsidiary in Mexico. Phase 1 of the project includes one liquefaction train with an export capacity of approximately 2.4 Mtpa. ECA LNG future expansion would include additional trains with an expected export capacity of approximately 12 Mtpa.

Train 1 of the Cameron LNG Phase 1 project started commercial operations in August 2019. Trains 2 and 3 are expected to begin LNG production in the first quarter and second quarter of 2020, respectively. Cameron LNG Phase 2, which has all necessary permits from the Federal Energy Regulatory Commission, encompasses up two additional liquefaction trains and up to two additional LNG storage tanks. Mitsui is also an equity owner of Cameron LNG, LLC, the development company for Cameron LNG Phase 1 and Phase 2.

Last November, Sempra LNG and Mitsui entered into a heads of agreement and are currently working to negotiate and finalize a definitive 20-year LNG sales-and-purchase agreement for the potential purchase of 0.8 Mtpa of LNG from the ECA LNG Phase 1 project.

Development of Sempra Energy's LNG export projects is contingent upon obtaining binding customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing and reaching final investment decisions, amongst other factors. In addition, the ability to successfully complete construction projects, such as the Cameron LNG export project, is subject to a number of risk and uncertainties.

Sempra LNG develops and builds natural gas liquefaction facilities and is pursuing the development of five strategically located LNG projects in North America with a goal of delivering 45 Mtpa of clean natural gas to the largest world markets, which would make Sempra Energy one of North America's largest developers of LNG-export facilities.

Sempra Energy's mission is to be North America's premier energy infrastructure company. With more than $60 billion in total assets reported in 2018, the San Diego-based company is the utility holding company with the largest U.S. customer base. The Sempra Energy companies' more than 20,000 employees deliver energy with purpose to approximately 40 million consumers worldwide. The company is focused on the most attractive markets in North America, including California, Texas, Mexico and the LNG export market. Sempra Energy has been consistently recognized for its leadership in diversity and inclusion, and sustainability, and is a member of the S&P 500 Utilities Index and the Dow Jones Utility Index.

This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words such as "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," "contemplates," "assumes," "depends," "should," "could," "would," "will," "confident," "may," "can," "potential," "possible," "proposed," "target," "pursue," "outlook," "maintain," or similar expressions or when we discuss  our guidance, strategy, plans, goals, vision, mission, opportunities, projections, initiatives, objectives or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements.

Factors, among others, that could cause our actual results and future actions to differ materially from those described in any forward-looking statements include risks and uncertainties relating to: actions and the timing of actions, including decisions, investigations, new regulations and issuances of permits and other authorizations by the U.S. Department of Energy, Federal Energy Regulatory Commission, U.S. Environmental Protection Agency and Pipeline and Hazardous Materials Safety Administration, states, cities and counties, and other regulatory and governmental bodies in the U.S. and other countries in which we operate; the success of business development efforts and construction projects, including risks in (i) obtaining or maintaining authorizations; (ii) completing construction projects on schedule and budget; (iii) obtaining the consent of partners; (iv) counterparties' ability to fulfill contractual commitments; and (v) the ability to realize anticipated benefits from any of these efforts once completed; the availability of natural gas and liquefied natural gas, and natural gas pipeline and storage capacity; equipment failures; changes in energy markets; volatility in commodity prices; moves to reduce or eliminate reliance on natural gas; risks posed by actions of third parties who control the operations of our investments; weather conditions, natural disasters, accidents, equipment failures, explosions, terrorist attacks and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, and subject us to third-party liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits) or may be disputed by insurers; cybersecurity threats to storage and pipeline infrastructure, the information and systems used to operate our businesses; the impact of federal or state tax reform and our ability to mitigate adverse impacts; changes in foreign and domestic trade policies and laws, including border tariffs, revisions to or the replacement of international trade agreements, and changes that make our exports less competitive or otherwise restrict our ability to export; and other uncertainties, some of which may be difficult to predict and are beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on the company's website at www.sempra.com. Investors should not rely unduly on any forward-looking statements.  These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

Sempra LNG and Port Arthur LNG, LLC are not the same as the California Utilities, San Diego Gas & Electric Company (SDG&E) or Southern California Gas Company (SoCalGas), or Oncor Electric Delivery Company LLC (Oncor) and are not regulated by the California Public Utilities Commission.

Twitter: @SempraLNGM

SOURCE Sempra LNG