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Cameron LNG startup is 'days away': Sempra executive

Highlights

President Trump planning visit to Louisiana terminal May 14

Owners and contractors trying to move beyond past delays

Houston — Production at Cameron LNG is expected to begin within days, an executive for co-owner Sempra Energy said Tuesday as one of the contractors sought to allay market jitters about the prospect of any further delays or cost overruns.

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The updated schedule may coincide with a May 14 visit to the Louisiana export facility planned by President Donald Trump.

The $10 billion project -- a joint venture of affiliates of San Diego-based Sempra, France's Total, Japan's Mitsui and a company jointly owned by Japan's Mitsubishi and NYK -- faced delays in late 2017 and early 2018. As many as 11,000 workers were on site last summer as contractors McDermott and Chiyoda pushed to get the project back on track. McDermott recently said that startup of trains 2 and 3 will be delayed until 2020.

In a statement Tuesday, McDermott said the project was 90% complete and that production from Train 1 was expected to start by mid-May. It said it has taken expanded oversight of the construction activities and reiterated that, as far as it was concerned, there wasn't any material change in the cost position of the project in the last quarter.

McDermott said it was responding to an announcement Monday by Chiyoda that the partner had recorded an unquantified change in estimate on the Cameron project in the first quarter, along with charges on other projects, pending arbitration. McDermott said it was not involved in that decision.

During a conference call Tuesday with analysts to discuss Sempra's latest financial results, Chief Operating Officer Joseph Householder and CEO Jeffrey Martin addressed the market's questions about the status of the project.

"The most important thing to recognize is this project is days away from beginning to produce LNG and start delivering it to our customers," Householder said. "We want to get it done. We want to get it done as soon as possible. Everybody's focused on it. What we're really excited about is we're starting up right now, and that's about all I can say right now."

Sempra has also proposed adding liquefaction facilities in Port Arthur, Texas, and Baja California, Mexico, as part of an ultimate goal of supplying up to 45 million mt/year of LNG to markets in Latin America, Asia, Europe and the Middle East.

MARKET OUTLOOK

Sempra is targeting a late 2019 final investment decision for the Mexico project and a late 2019 or early 2020 FID for Port Arthur LNG. US regulators recently granted a permit certificate to the Texas project, as well as the right to export cargoes to countries with which the US does not have a free trade agreement.

Asked by an analyst on the conference call about recent weakness in global LNG pricing, Martin said Sempra still has confidence in the long-term contracting model for financing its growth and expansion plans.

"Our goal as a first step to move toward FID is making sure that we have high-quality customers contracted for 20 years with very, very strong balance sheets," the CEO said. "And remember, we're really on the infrastructure side of this business, right? So we want to play in exactly the same role or very similar to what we're doing at Cameron."

-- Harry Weber, Harry.Weber@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com