Sempra Energy CEO Debra Reed on Thursday outlined the company’s strategy, which is centered around the surge in North American natural gas supplies, particularly from U.S. shale plays. Reed sees opportunity in Mexico, where Sempra already holds a big stake, as that country migrates from oil to natural gas use.
“Natural gas is clearly developing faster than anyone would have anticipated, with more than 100 years of supply [in the United States],” she said. “That is greatly beneficial to our [liquefied natural gas] export business, and it is also greatly beneficial longer term to our storage business. Third-parties are going to need a place to store gas before export.”
Reed said the supply surge is also helping Sempra’s infrastructure business, particularly south of the border. “Mexico is moving from an oil economy to a natural gas economy, and we are the second largest energy company in Mexico,” she said.
“We feel we are greatly positioned to be able to take advantage of that change that is occurring because of the shale gas boom in the United States.”
Sempra recently reported that it had held debt-equity initial public offerings (IPO) in Mexico during the first quarter, raising nearly $1 billion for its expanding operations south of the border (see Daily GPI, May 6).
Reed has remained bullish about the Mexican developments, calling the IPO “extremely successful” and noting that since the launch, shares of a newly created company, IEnova’s, have increased in value by 22%. The March stock IPO, in which Sempra sold 19% of its interest, was preceded by two debt sales in February that garnered $400 million.
Reed made her remarks during Sempra’s annual financial analysts meeting in New York City. During a question-and-answer session at the meeting, Sempra COO Mark Snell said that he thinks that Pemex and Mexico’s new president, Enrique Pena Nieto, will be more welcoming to foreign investment in the country’s energy industry.
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