What are the objectives behind the recent merger between IEnova and Sempra?
IEnova set out as a Sempra company. In 2013, Sempra listed the company on the Mexican Stock Exchange, and about 70% was owned by the public, although Sempra was always the majority shareholder. Sempra decided to buy back a 100% stake and create a new vehicle called Sempra Infrastructure, which combines the two major infrastructure companies of Sempra: Sempra LNG and IEnova. Sempra keeps two large lines of business: the utilities or public service companies that are in California, Texas, and Mexico; and Sempra Infrastructure. The creation of this platform in North America, Sempra Infrastructure, means viewing the energy sector not as an isolated one in Mexico, but rather as a regional entity. Sempra, in particular, is an energy company that has allowed this integration. We have 11 natural gas interconnections between Mexico and the US. We are one of the top 10 producers in renewable generation in Mexico. We also have the largest refined products import terminal in the Gulf of Mexico. In our way, we have effectively triggered or supported the energy integration of North America, and creating this platform gives us incredible opportunities and a more regional vision, and not only of Mexico.
What strategy is the company employing in Mexico?
Our strategy in Mexico, in terms of clean energy, is participation in the public tenders. But we are also looking for contracts with the large Mexican industries, who require clean energy at competitive prices. What makes our clean energy platform truly exceptional is the position we have on the border between Baja California and California. We have several projects operating there including a combined cycle power plant and two dedicated transmission lines owned by Sempra, which run from Baja California to California with between 2,000 and 3,000MW of available capacity. That means we can continue developing renewable generation in Mexico such as wind energy or solar, or we could work on batteries, a vital components of tomorrow's electricity market. These we could sell to the US market, where there is an insatiable appetite for clean energy. California continues to increase its clean energy goals.
How important is Mexico within the international strategy of Sempra Infrastructure?
Sempra Infrastructure is today essentially a North American platform. We have a presence in two countries, Mexico and the US, and Mexico represents more or less 50% of our portfolio. So not only it is important in this 50/50 equation, but much of what we do at Sempra Infrastructure, and what we will continue to do, has a regional focus. Our most important project is the Energía Costa Azul LNG Export Project, worth over USD2 billion, which will bring gas from the US. It will transport it through the pipelines of the US and arrive in Ensenada where we will invest those USD2 billion to liquefy gas and transport it to isolated markets in Mexico and other parts of the world. Mexico is a fundamental part of Sempra Infrastructure.
What are the main goals of the company for next year?
We are in the gas transportation business, which is one of our core businesses, as well as the development of gas pipelines, which allows CFE to burn less fuel and more gas. It has also allowed other plants to be installed, and not only for generation for industries that demand this gas. So, it has been a major economic development trigger. There are gas resources in Mexico that have yet to be developed, and meanwhile we have access to abundant gas in the US. Currently there is a new momentum to strengthen supply chains between Mexico and the US, support the economic recovery of the region, and bring investments that had gone to other regions back to North America. In these circumstances, it is vital for Mexico to have a sufficient supply of energy, by adopting a long-term approach to capture the many available opportunities.