San Diego-based Sempra Energy is still in the energy business, but the company announced at its annual Investor Day meeting with Wall Street analysts on Tuesday that it was removing the word “energy” from. his title. The Fortune 500 company will now have the one-word name “Sempra”.
However, the legal name of the company will continue to be Sempra Energy and will still be listed on the NASDAQ stock exchange under the symbol SRE.
In a press release, the company said it “has refreshed its brand to better align with the company’s North American infrastructure strategy.” During the meeting, Sempra CEO Jeff Martin listed a number of reasons for the change, including “our company’s commitment to being a leader in solving some of the biggest challenges facing our industry. “.
The abandonment of the word “energy” comes as companies involved in the exploration and development of fossil fuels are under increased pressure to meet state, national and international targets for reducing greenhouse gas emissions.
In May, a group of Sempra shareholders asked the company to publish a report on how Sempra’s assets and lobbying activities align with the Paris climate treaty. The proposal was rejected by shareholders but received 37% support in the preliminary vote.
Paul Patterson, a New York utilities analyst at Glenrock Associates, said the name change was cosmetic.
“The term ‘energy’ may have some implications for some people and not having that word may help people less identify (Sempra) with a fossil fuel company, but that doesn’t fundamentally change things,” said Patterson. “You have seen companies do this in the past. It’s not unusual. “
Sempra’s subsidiaries, which include San Diego Gas & Electric, incorporate renewable energy sources into their energy mix, but natural gas is an integral part of their portfolios. Natural gas burns twice as clean as coal, but it’s a fossil fuel.
“On the one hand, we are faced with the challenge of increasing global CO2 emissions with potentially disastrous impacts on our environment,” said Martin. “And on the other hand, there is a need to meet the growing demand for energy as economies around the world continue to grow. One of the main lessons of this conference is that our business strategy is clearly focused on solving these two challenges. ”
Over the past three years, Sempra has refocused its focus on assets in North America, particularly California, Texas and Mexico.
In 2018, Sempra spent $ 9.45 billion to acquire Dallas-based Oncor, Texas’ largest utility. It then sold renewable energy and natural gas assets in states such as Kansas, Minnesota, Mississippi and Alabama, as well as assets in South America. Through its IEnova subsidiary in Mexico, Sempra has made investments in natural gas, wind and solar projects.
The company has also aggressively embarked on the export business of liquefied natural gas, or LNG, with Sempra contracts that have so far sent U.S. production to overseas markets in 25 countries eager to replace the coal by natural gas.
The company is the majority owner of the $ 10 billion Cameron LNG facility on the Louisiana Gulf Coast. In addition, IEnova recently received approval from the Mexican government to add an export component to the already existing Energía Costa Azul LNG facility in Ensenada.
Martin told analysts that the Ensenada project is the company’s top infrastructure priority and that $ 2.4 billion has been deployed to get LNG exports on-line “on time and on budget. “by the end of 2024.
Sempra also plans to build a massive 3,000-acre LNG facility over three miles of waterfront in Port Arthur, Texas, but Sempra LNG chief executive Justin Bird said Tuesday that a preliminary agreement with the giant global oil company Saudi Aramco failed as Aramco “reassessed their international gas strategy.
The deal proposed in 2019 called for Aramco to eventually buy 5 million tonnes of LNG per year for 20 years and take a 25% stake in Port Arthur LNG as the Saudis sought to diversify their energy holdings. But the economic effects of the pandemic and the volatility of the global gas market led Aramco to take a step back.
Bird said the two companies remain on good terms and remain open to future LNG partnerships, as well as potential projects using what’s called “blue hydrogen,” which extracts carbon from natural gas, the captures and stores it instead of emitting it in the air. .
In the meantime, the company is considering design changes that could reduce emissions at Port Arthur LNG.
A final investment decision on the facility has been repeatedly delayed. In May, Sempra had pushed it back to 2022 and on Tuesday Martin said: “Clearly, it’s backwards in terms of timing. “
Instead, the company has prioritized Cameron LNG’s expansion plans by adding an additional production unit – called “trains” in industry jargon – to the site.
Sempra also plans to build a carbon capture and sequestration facility in Hackberry, Louisiana, home of the Cameron Project, with the goal of reducing greenhouse gas emissions. The sequestration facility would store CO2 from the LNG plant, as well as other industrial facilities, with Bird saying it could serve as a hub for the region.