Sempra (SRE) Just Locked In Two Decades of LNG Demand

Sempra (SRE) Just Locked In Two Decades of LNG Demand

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• PBR-A

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On September 14, Sempra Infrastructure, a subsidiary of Sempra (NYSE:SRE), signed a 20-year deal to sell roughly 0.8 million tonnes of liquefied natural gas a year to Petrobras, marking the first time a South American company has signed on as an LNG customer. The gas will flow from Port Arthur LNG Phase 2, a Texas project still years from completion, which tells you this is a bet on where global energy demand is headed rather than a quick win. Combined with a stronger-than-expected second quarter and record electricity demand in Texas, this looks like a company trying to grow in several directions at once.

A Bet That Pays For Decades

Sempra Infrastructure's Petrobras contract runs for two decades, locking in demand long before Port Arthur LNG Phase 2 ships its first cargo. The project reached a positive final investment decision in September 2025 and is expected to bring its two liquefaction trains online in 2030 and 2031, adding about 13 million tonnes of capacity and nearly doubling the total Port Arthur facility to roughly 26 million tonnes a year. Petrobras becomes Sempra Infrastructure's first South American customer, widening a buyer base and reinforcing what the company calls a dual-coast strategy serving both the Atlantic and Pacific Basins.

The growth story extends well beyond LNG. Sempra's second-quarter 2026 GAAP earnings jumped to $1.21 per diluted share from $0.71 a year earlier, and adjusted earnings rose to $1.16 from $0.89. In Texas, Oncor is riding a genuine demand surge: ERCOT set an all-time peak load of 91 gigawatts in July, and regulators have endorsed more than $7 billion of new transmission spending to support 16 gigawatts of that growth. A newly approved interconnection process, Batch Zero, could make roughly 44 gigawatts of large-load requests in Oncor's territory eligible for service, more than 140% above the grid's current 31-gigawatt peak. Management raised full-year GAAP EPS guidance to a range of $5.02 to $5.55 and kept its 7% to 9% long-term earnings growth target intact.

The Long Wait Until Payoff

The Petrobras volumes do not start moving until Port Arthur LNG Phase 2's trains enter service in 2030 and 2031, so the newly signed contract does not touch near-term cash flow. Sempra is still finishing Phase 1 of the same project, with commercial operations not expected until late 2027 and 2028, and the company describes further expansion phases as only in early development. That is a lot of construction risk stacked on a single Texas site before any of the new LNG revenue shows up.

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