Sempra Rethinks Bechtel For Cameron LNG Expansion As Costs Surge: Report
Portfolio Pulse from Lekha Gupta
Sempra (NYSE:SRE) is reconsidering its choice of Bechtel Energy for the Cameron LNG expansion in Louisiana due to rising construction costs. This dispute highlights the broader issue of increasing costs in the U.S. LNG export project sector. Sempra is seeking new bids for the project's engineering, procurement, and construction contractor. The Cameron LNG Phase 2 project involves Sempra LNG, TotalEnergies SE (NYSE:TTE), Mitsui, and Japan LNG Investment LLC. Sempra recently reported Q1 adjusted EPS of $1.34 and sales of $3.64 billion, missing sales consensus. SRE shares dropped 0.36% in premarket trading.
May 13, 2024 | 12:28 pm
News sentiment analysis
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NEGATIVE IMPACT
Sempra's reconsideration of Bechtel for the Cameron LNG expansion due to rising costs may signal project delays or increased expenses, potentially affecting investor sentiment and stock performance.
The reevaluation of the contractor due to surging costs could lead to project delays or increased capital expenditure, negatively impacting Sempra's financial outlook and investor sentiment in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
As a partner in the Cameron LNG Phase 2 project, TotalEnergies SE may face implications from the potential delays or increased costs due to the contractor reevaluation, possibly affecting its investment returns.
TotalEnergies SE's involvement in the Cameron LNG project means that any delays or cost overruns could negatively impact its projected returns from the venture, potentially affecting its stock performance.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Virtus Reaves Utilities ETF, holding Sempra stock, might see minor impacts from Sempra's project cost concerns, potentially influencing the ETF's performance.
UTES, by holding Sempra stock, could be indirectly affected by any negative developments from the Cameron LNG project, potentially impacting its performance, though the effect might be limited.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEGATIVE IMPACT
The SPDR Select Sector Fund – Utilities, which includes Sempra, may experience indirect effects from the news due to its exposure to SRE, potentially impacting the ETF's performance.
Given XLU's exposure to Sempra, any negative sentiment or performance issues stemming from the Cameron LNG project could indirectly affect the ETF's performance, albeit to a lesser extent.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50