San Diego-based Sempra Energy senior executives on Monday expressed confidence the holding company's more focused strategy emphasizing U.S. and Mexico natural gas infrastructure assets will win over skeptics and help ride out the impairments tied to the sale of renewable energy and Gulf Coast storage projects.

Assuring that liquefied natural gas (LNG) will be produced next year at all three production trains now under construction at the Cameron LNG site in Louisiana, CEO Jeff Martin said the addition of France’s Total SA as a 16.6% stakeholder, acquired through its takeover of Engie’s LNG portfolio, is almost a sure bet to support future expansions.

In addition to Cameron, Sempra has an export project at Port Arthur, TX, which has not reached a final investment decision, although a general contractor has been named. Sempra also operates the Energia Costa Azul (ECA) LNG import terminal in Mexico, where it has liquefaction and export capability. Two more trains could be added in the future at Cameron as well.

At the recent World Gas Conference in Washington, DC, Martin said he met with Total CEO Patrick Pouyanne. When Total took over the Engie LNG portfolio, Pouyanne estimated that the oil major by 2020 would manage global LNG volumes totaling about 40 million metric tons/year, making it the second largest global player among the majors with a worldwide market share of 10%.

Martin said Total has “a very ambitious view of an integrated natural gas strategy...with roughly half being equity owned gas.”

Sempra President Joe Householder said Total officials made it clear that becoming a Cameron stakeholder offered an opportunity to participate in future expansions. "They are very open about that and want to engage in that topic with our other partners," he said.

Sempra has no priority on the LNG options.

"Each of the projects has a little different situation and each has a lot of market interest,” Householder said. "We have permits in place at both Cameron and ECA, and we're working and hope to finalize our permit at Port Arthur this year. Each of them is a little bit different, but we like them all and don't prioritize one over another."

In Mexico, Sempra is considering a small-scale or larger export project. If it were to build a larger export project, more pipeline capacity would be required. In any case, Martin said a key for exporting gas from Mexico’s west coast is access to the Permian Basin.

"If you can have access to the Permian in a way that is cost-effective there is a huge interest from the market for launching LNG off the west coast," he said.

Martin indicated during a quarterly earnings conference call that the company has an ongoing series of meetings with dissatisfied major stockholders, Elliott Associates LP, Elliott International LP and Bluescape Resources Co., which together hold an estimated 4.9.% of shares. The dissident shareholders have pushed for Sempra to sell its renewables and midstream businesses, which the company is doing, but they want all of the LNG assets and South American utilities also divested.

"We're highly engaged in a dialogue at the highest levels of each organization and had multiple face-to-face meetings, and in our view constructive conversations are continuing," Martin said.  "At the end of the day, our management team believes that our focused North American strategy should create significant long-term shareholder value."

During the question-and-answer period with analysts, Martin emphasized that LNG and Mexico are core to Sempra's strategy.

Sempra reported a net loss in 2Q2018 of $561 million (minus $2.11]/share), versus year-ago earnings of  $259 million ($1.03). The loss was in part related to the planned sale of holdings in U.S. wind assets and gas storage facilities. Without the one-time impairments, Sempra would have earned $361 million ($1.35/share), compared with $276 million ($1.10). Revenue was nearly flat at $2.564 billion from $2.533 billion.

Texas-based utility Oncor provided $114 million to quarterly earnings, following the close of the $9.45 billion purchase in March.