Calling his company a “growth-oriented” utility, Sempra Energy CFO Mark Snell said the natural gas infrastructure part of Sempra’s business is being redefined and growing at a slower pace. Snell made these observations last Wednesday at the Barclays Capital CEO Energy-Power Conference in New York City.

“Our hallmark is to be more utility-like but with a growth focus,” Snell said. “If you look at the assets we have now, particularly the ones in California, we expect to see that growth continuing as we go forward.” San Diego-based Sempra, he said, has long been primarily focused on growth in its utility businesses: two California companies, Southern California Gas Co. and San Diego Gas and Electric Co., and utilities in Mexico, Peru and Chile.

“You can take a look at our 6-8% annual growth, and I think that is in the top quartile in the industry [over the past 10 years],” Snell said. In contrast, he characterized Sempra’s pipeline, storage and liquefied natural gas (LNG) businesses as slowing in growth, although most of those facilities are fully contracted.

He said Sempra was pursuing additional partnering ventures in Mexico with Petroleos Mexicanos, the national petroleum company, and additional uses of Sempra’s Cameron, LA, LNG terminal, which has only 40% of its 1.5 Bcf/day capacity under long-term contract. Cameron represents literally “half of a liquefaction facility,” said Snell, referring to Sempra’s ongoing pursuit of export capability at the site.

“We have the tanks and the marine facilities all in place, and we have been exploring various opportunities to do something different there,” Snell said.

Changes are also ongoing in Sempra’s independent gas storage business, which is concentrated in the Southeast. “We’ve cut back the total capacity we expect at these facilities,” said Snell, noting that with low wholesale natural gas prices and low volatility, storage doesn’t carry as much value now as it did three or four years ago.

“We’re expanding our facilities [Bay Gas Storage in southwest Alabama and Mississippi Hub in south-central Mississippi] on a fairly cost-effective basis, but we’re not putting in lots of compression, nor are we expanding beyond the [salt dome] caverns we are currently working on. We have been able to lower our costs of the expansion to about $8 million/Bcf, so it is quite inexpensive expansion.” Snell said most of Sempra’s storage expansion will be completed in the next two years.

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