Sempra Energy has further delayed a final investment decision on its planned Port Arthur LNG export project in Texas because of weakened global demand for liquefied natural gas resulting from the Covid-19 pandemic.

"Given current market dynamics, a final investment decision is now expected for the project in 2021," Sempra said Monday in its first-quarter earnings release. In March, the company hinted it may take longer to sanction the project than the previous target of the third quarter of 2020.

The announcement comes as the outlook for LNG sanctions this year dims against the backdrop of the Covid-19 pandemic. Last week, Cheniere said it had cut its forecast in half for projects it expects to move forward in 2020 and 2021.

The Port Arthur LNG project envisages a two-train, 13.5 million tonnes per annum development, and Sempra has hired contractor Bechtel to carry out engineering, procurement and construction work at the Jefferson County, Texas site.

The company has previously said that about 70% of the offtake capacity at Port Arthur LNG has been sold, with Aramco Services taking 50% and Poland's PGNiG taking 20%.

Sempra, through its Ienova subsidiary, is also developing the Energia Costa Azul (Eca) LNG project in Baja California, Mexico. The company previously said it expects to sanction the 12 million tpa facility in the second quarter of this year after receiving its final export permits from the Mexican government.

In its earnings announcment, Sempra said Ienova "continues to develop infrastructure projects that provide consumers in Mexico access to cleaner, more reliable energy". However, it also said that it was "reasonable" to expect that some construction capital would be deferred from 2020 to 2021 because of the Covid-19 pandemic.

Sempra is the main developer behind the Cameron LNG export project in Louisiana, the first two trains of which are already in service. The third and final train is the final commissioning, and is on track to begin commercial operations in the third quarter of this year.

The company's share of full-year run-rate earnings from Cameron LNG is anticipated to be between $400 million and $450 million annually starting in 2021, when all three trains are in commercial operations under Cameron LNG's tolling agreements.

Sempra, which also has a substantial utility business in the US, reported first-quarter 2020 earnings of $760 million, or $2.53 per diluted share, compared to first-quarter 2019 earnings of $441 million, or $1.59 per diluted share.

LNG

Sempra delays Port Arthur LNG decision to 2021