Sempra's Q2 2025: Navigating Contradictions on Port Arthur, Oncor Investments, and LNG Market Outlook

Capital Investment and Infrastructure Expansion:
- Sempra is targeting a capital investment of $13 billion this year, with over $10 billion allocated to its growing U.S. utilities.
- The company is focusing on its five value creation initiatives, including capital recycling and regulatory advocacy.
- This expansion is driven by the need to strengthen regulatory compacts and support growth in Texas.

Oncor's Economic Growth and Capital Needs:
- Oncor, a Texas utility, continues to report strong growth, with over 20,000 new residential connections in Q2 2025.
- The company's rate case aligns its cost structure with current operating environments and seeks a 45% equity layer and a 10.55% ROE.
- The growth in Texas is driven by infrastructure expansion, strong demand in West Texas, and supportive regulatory legislation like HB5247.

Port Arthur LNG Phase 2 Progress:
- Port Arthur LNG Phase 2 has received a non-FDA export authorization and has executed a 20-year SPA with JERA for 1.5 MTPA of capacity.
- The project is advancing with significant commercial progress and is expected to reach a final investment decision (FID) in 2025.
- This progress is attributed to the project's strong strategic position in the LNG market and supportive energy policies.

Capital Recycling and Strategic Transactions:
- Sempra Infrastructure is advancing the sale of its Ecogas and Cimarron Wind projects, expected to close in mid-2026.
- Sempra has entered into a non-binding LOI with KKR for a potential equity sale in Sempra Infrastructure, ranging from 15% to 30% or above.
- These strategic moves are aimed at optimizing equity value, minimizing tax leakage, and supporting Sempra's 5-year capital plan.