Speculation continues unabated regarding the fate of RBS Sempra Commodities, which has been close to a deal to dispose of the 51% interest of the Royal Bank of Scotland (RBS) in its joint venture trading operation with San Diego-based Sempra Energy. Sempra appeared to be further away on Tuesday from making an announcement on the sale of the bank’s share, which Sempra has first-rights to obtain itself.

Sempra’s investment-grade credit ratings will remain unaffected until there is a definitive deal, an analyst at Standard & Poor’s Ratings Services (S&P) told NGI on Tuesday. The details of the trading deal are needed to determine its potential impact on Sempra’s cash flow and other financial metrics before S&P would consider a revision of the energy holding company’s rating.

As evidenced by the departure last Friday of the joint venture trading operation’s CEO, traders are leaving RBS Sempra, the analyst said. “Obviously, personnel see the possibility of the asset maybe being sold and they are seeking to fortify their own careers, but there has been a lot of noise with RBS looking to sell its stake and Sempra maybe also selling its interest as well. There are a lot of rumors and noise, as I say, but nothing concrete has emerged from either side in terms of reaching any kind of firm, concrete agreement.”

The fact that the joint venture trading operation under the deal Sempra struck with RBS provides a good portion of the California energy holding company’s cash flows each year the structure of the ultimate joint venture sale will be a key for rating analysts. The eventual impact on Sempra is still not clear, the S&P analyst said.

What began as a trio of major bidders in the $4 billion range — Deutsche Bank, JPMorgan Chase and Australia-based Macquarie Group — was reduced to one, JPMorgan, in mid-January (see Daily GPI, Jan. 22). Then the Obama administration released a proposal to limit banks’ involvement in speculative trading, which has caused speculation that JPMorgan has backed off and raised anticipation that the other two bidders are rejoining the competition. Macquarie Group, for one, has been rapidly expanding its energy sector footprint in North America in recent years, including physical trading operations centered around major utilities in the Pacific Northwest and western Pennsylvania.

In a separate area, rating analysts such as S&P are keeping a close eye on Sempra and others in the North American liquefied natural gas (LNG) business, given the global LNG market being what one analyst called “very soft recently.” There are minimal cargoes coming to the United States right now and still a “pretty wide price spread” among Europe, Asia and the U.S., an analyst said. “There really hasn’t been much positive in this sector of late.”

What Sempra does have is take-or-pay contracts for large amounts at its two LNG terminals — Energia Costa Azul in North Baja California in Mexico and Cameron along the Louisiana Gulf of Mexico coast — and that remains a positive, the analyst said.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.