The door is open to future equity partners, a possible transportation role and ultimately a slight delay in the start-up of San Diego-based Sempra Energy’s aggressive plans for siting two liquefied natural gas (LNG) receiving terminals in the West and Gulf coasts by 2007, according to Sempra’s CEO Stephen Baum, responding to questions from financial analysts in a earnings conference call Thursday.

The delay would be no later than late 2007, he said. “It now appears that LNG will not impact our earnings before late 2007,” said Baum, noting that compared to previous estimates, the horizon for LNG has “slipped slightly — maybe not quite by a year, but it slipped a little bit, so the impact of LNG earnings would not be until the end of the year in 2007.”

“All possibilities are before us,” Baum said, responding to a question about whether he would consider selling equity shares in one or both of Sempra’s LNG projects — Cameron in Louisiana, or Costa del Azul on the North Baja Pacific Coast in Mexico. “Our preference is to make money on these projects, so we’ll consider opportunities that make us money. I don’t rule out anything.”

Baum, however, said Sempra was not interested in upstream supply-related investment because that is not the company’s business focus. He did say Sempra does “a lot of ship-chartering in the oil business” as part of its trading operations, so the company is considering getting involved in the transportation of its LNG supplies. “It is a business we know something about,” he said, quickly adding that the ownership of ships is not. “It may be, depending on our contract arrangements, we would move to some degree into the transportation part of the value chain. It would not be a principal focus, though, only as an adjunct.”

Recent political upheaval in Bolivia — at one time a leading potential source of LNG for Sempra — prompted a question about whether this delays Sempra’s efforts to lock up long-term supplies for one or both of its proposed import terminals.

“We had hoped that Bolivia would be able to solve its political problems and that gas would flow,” Baum said. “It really makes a lot of sense from a cost basis for that gas to reach North America (it’s about half the distance of other viable sources outside of Alaska). But it has been overtaken by politics, and I think everyone knows the privatization efforts for the export of gas are heavily under fire and have become a significant political issue costing the president his job, so I think it is fair to say that this source of gas is certainly delayed. In the end, whatever government comes to power, the economic necessity is very real for Bolivia to bring that gas to market, but not on the timetable we had hoped for.”

In response to another question related to how credit-rating agencies view LNG projects and particularly taking on two such projects, Baum said he has reiterated that Sempra will not go forward with either project without an “identifiable, credit-worthy counterparty for a long-term contract covering at least a portion of the plant’s throughput” to avoid putting the company in the position of “uncertainty from any of our constituencies about the viability of those capital expenditures.”

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