Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 82

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 82
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, termination of LNG offtake contracts that have not been replaced within a specified timeframe, or material breach of certain affiliate contracts; or (iii) the occurrence of certain monetization events, including a third-party sale of PA2 JVCo.

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Because these redemption features are contingent on events not solely within SI Partners’ control, we present Blackstone’s equity interest as a CRNCI, which appears between liabilities and equity in the mezzanine section of Sempra’s Condensed Consolidated Balance Sheet. We initially recorded the CRNCI at the amount for which Blackstone has a claim on the underlying net assets in liquidation at book value. At September 30, 2025, the CRNCI is not currently redeemable, nor is it probable that it will become redeemable because the forecasted completion of the PA LNG Phase 2 project is highly unlikely to occur beyond the contractually specified date in which Blackstone’s ownership interest becomes redeemable; therefore, we did not accrete the CRNCI to its redemption value. If it becomes probable that the CRNCI will become redeemable, we will make a policy election at that time regarding our accounting method of accreting the CRNCI to its redemption value.Either party may propose a third-party sale or other monetization event. Proceeds from such a sale or monetization event are generally allocated 40.1% to SI Partners and 59.9% to Blackstone until Blackstone achieves a contractually specified return on its contributed capital, and thereafter 90% to SI Partners and 10% to Blackstone. Allocation of InterestsUpon reaching FID in September 2025, Port Arthur LNG II paid $1.9 billion to Port Arthur LNG I for a 50% ownership interest in shared common facilities located at the site of the natural gas liquefaction projects. As a result, claim on the underlying common facilities in liquidation is split equally between the PA LNG Phase 1 project and the PA LNG Phase 2 project. However, although the ultimate cost of the common facilities will be split equally between the PA LNG Phase 1 project and the PA LNG Phase 2 project upon completion of the PA LNG Phase 2 project, payments for construction costs associated with the common facilities may be made by one project on behalf of both, necessitating an allocation of the appropriate claim on the underlying common facilities between the PA LNG Phase 1 project and the PA LNG Phase 2 project. 

Because ownership interests in SI Partners, its subsidiaries