With three major North American liquefied natural gas (LNG) export projects under development, San Diego-based Sempra Energy's top executives are seeing an uptick in the global market, which they believe the company can potentially cash-in on big in the 2020s.

"As you can see in the media, the LNG global market has turned quite positive," Sempra CEO Debra Reed said Tuesday on a quarterly earnings call, referring to Royal Dutch Shell plc comments on Monday that year/year natural gas exports grew by 29 million metric tons (mmt) to 293 mmt in 2017, as global demand from new areas was stronger than expected.

Citing an upswing in market interest in the 2022-23 time frame, Sempra President Joseph Householder, who heads Sempra's infrastructure businesses, agreed with Shell that the LNG market is tightening, all of which improves the prospects for Sempra's three projects in Cameron, LA; Port Arthur, TX; and Energia Costa Azul (ECA) in North Baja California, Mexico.

"Increased volumes are being taken up with improving demand," said Householder, noting that the ongoing uptick in oil prices is also improving the economics for U.S. LNG projects on a global basis. Falling current and future Henry Hub gas prices also improve the competitive positions of the North American LNG projects.

"The bottom line for us is that we have three projects that are in good shape from both permitting and marketing standpoints," said Householder, who noted that Sempra LNG marketing representatives are very active on a regular basis throughout the Asia-Pacific nations.  "We're a company with multiple projects, all of which we are excited about."

Cameron LNG, where three trains are now under construction, also has federal permits to build two additional trains pending sufficient market support, Householder said. "Trains four and five are fully permitted at [the Federal Energy Regulatory Commission] and [the Department of Energy], so it is a very valuable option for us and our partners because it is a low-cost build. And our focus today is getting the first three trains in service [in 2019]."

Householder said comments that were recently made by the CEO of Total SA, which has an ownership stake in Cameron LNG,  are "very positive for expansion." Total CEO Patrick Pouyanne has publicly said he favors expanding the Cameron facility beyond the first three trains.

"I have had a number of conversations on this topic, and we are anxious to keep that process moving," he said, adding that Total wants to get something done this year.

At ECA, Sempra now has longer-term plans for a proposed large-scale, 12 mmt export facility, with a more modestly sized facility planned sooner. "It received all of the needed permits in Mexico last December, and there is a lot of interest in our building a mid-scale facility sooner, so we are looking at a 2.6-ton facility that would fit on the site, without precluding the building of the larger facility longer term," Householder said.

Householder added that Sempra is studying a couple of related issues, the first being the adequacy of existing pipeline capacity to support the initial facility, and whether the company can be assured that building the smaller export facility in Mexico won't sidetrack the eventual development of the 12-ton facility. "Eventually, the project also would require building a large-scale pipeline back to the Permian Basin."

The third project at Port Arthur is an "excellent location ," according to Householder, who noted that Sempra has been working with Woodside Petroleum Ltd. under a memorandum of understanding signed last year. "This is a really excellent LNG project from a technical and gas supply perspective," Householder said. "We think the LNG costs are going to be lower than the ones at Cameron based on the optimization work we have done."

Householder said Sempra hopes to launch at least one of the three projects this year, followed by a financing decision next year. "That puts the production into the window of 2023-24, when the supply/demand curve opens up," he said.

Separately, the Sempra senior executives talked about ongoing developments with the North American Free Trade Agreement (NAFTA) and national elections in Mexico in terms of their potential impact on the nation's energy industry reforms. Reed and Householder expressed confidence that their projects should fare very well regardless of the outcomes of NAFTA or the new president.

"Almost everything we were doing in Mexico was taking place before the current reforms," Householder said. "Almost everything we have done down there didn't require energy reform."

Regarding ECA's proposed transformation to LNG exports, Householder said that Petroleos Mexicanos (Pemex) has been a partner with Sempra at the ECA site and now there is a new agreement between Sempra and the Mexican government's oil company.  Under a new agreement, Pemex is stepping aside and allowing its Mexican unit and the Sempra LNG team to pursue building a liquefaction facility, and in the interim until 2028 there are contracts in place for importing LNG.

"We want to keep those [import] contracts in place as they provide substantial EBITDA and earnings for us," said Householder, adding that he sees no problem for the export permits regardless of who wins Mexico's presidential election this year.