Company: SREA
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001032208-25-000027
Chunk: 152

Company: SEMPRA
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 152
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 term for approximately 1 Mtpa of LNG.

▪ENGIE S.A. for a 15-year term for approximately 0.875 Mtpa of LNG.

We have an EPC contract with Bechtel to construct the PA LNG Phase 1 project, which has an estimated price of approximately $10.7 billion. We estimate the capital expenditures for the PA LNG Phase 1 project will be approximately $13 billion including capitalized interest at the project level and project contingency. The actual cost of the EPC contract and the actual amount of these capital expenditures may differ materially from our estimates, including as a result of the imposition of tariffs. We expect the first and second trains of the PA LNG Phase 1 project to commence commercial operations in 2027 and 2028, respectively.

As we discuss in Note 12 of the Notes to Condensed Consolidated Financial Statements, in April 2025, an incident occurred at the site of the PA LNG Phase 1 project that resulted in the deaths of three Bechtel employees and the injury of two Bechtel employees. OSHA has opened an inspection with respect to Bechtel. The cause of the incident remains under investigation. In connection with the incident, as of May 8, 2025, three complaints have been filed on behalf of 17 plaintiffs, and a TRO has been issued to preserve relevant evidence at the construction site. Bechtel is continuing construction of the PA LNG Phase 1 project, subject to applicable limitations under the TRO and ongoing OSHA inspection. We are evaluating the parties’ rights and obligations under Port Arthur LNG’s EPC contract with Bechtel in light of this incident.

As we discuss in Note 10 of the Notes to Condensed Consolidated Financial Statements, SI Partners and ConocoPhillips have provided guarantees relating to their respective affiliate’s commitment to make its pro rata equity share of capital contributions to fund 110% of the development budget of the PA LNG Phase 1 project, in an aggregate amount of up to $9.0 billion. SI Partners’ guarantee covers 70% of this amount plus enforcement costs of its guarantee. As of March 31, 2025, an aggregate amount of $2.7 billion has been paid by SI Partners’ subsidiary in satisfaction of its commitment to fund its portion of the development budget of the PA LNG Phase 1 project.

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Port Arthur LNG has a seven-year term loan facility for an aggregate principal amount of approximately $6