Justin Bird: Yes. Hi Anthony and thank you, Jeff. Yes. So, let me start with construction and then I’ll go to the heart of your question. So, we’re seeing solid progress on construction at both ECA Phase 1 and Port Arthur Phase 1. I’ve had opportunities to visit both sites recently. Jeff and I were at ECA just two weeks ago observing construction. And I was at Port Arthur recently for the one-year commemorative groundbreaking. Both projects remain on track. We’re not seeing the supply chain issues. At ECA Phase 1, we remain on track for COD in the summer of 2025. We’re now more than 80% complete. Construction is going across all areas of the project. We have about 4,000 people deployed on-site and have over 15 million hours worked with no lost-time incidents.
Bechtel at Port Arthur Phase 1 construction activities are progressing well. As Karen mentioned in her remarks, we’re focused on the foundation stage construction, soil stabilization piling, concrete pouring, and it’s exciting to see we recently commenced structural steel. In terms of our development projects, we remain excited about these projects. We’re continuing to see strong market interest and do expect these projects to advance. In terms of construction contracts or progress at Port Arthur Phase 2, while we’re awaiting our DOE non-FDA export permit, we’re continuing to work with Bechtel on an EPC agreement that can optimize efficiencies with the Phase 1 construction schedule. We’re also continuing marketing efforts for off-take and equity.
On Cameron Phase 2, we’re currently working with the Cameron partners to optimize cost through value engineering. And as Jeff mentioned, we’re also exploring the procurement or reservation of long lead time and critical path equipment. Cameron Phase 2 is a comparatively low emission project and it’s a brownfield asset sourcing low-cost gas. So we think this is really important. And as Jeff had previously mentioned, we’re advancing that with a view toward taking FID in the first half of 2025. I guess as a takeaway, I talk about the reverse Field of Dreams model, when they come and when we achieve the right returns we’ll build it. Along these lines, we’ll only move forward with our projects when we have the right cost and risk structure and long-term contracted cash flows that support our corporate strategy, our targeted mid-teen equity returns and create value for our shareholders.
Jeff Martin: Anthony, I’d also mention to the heart of your question, the Bechtel relationship’s a strategic relationship for us. They’re very, very helpful kind of the best in the business in the Gulf. And that’s why Justin commented on the importance of not demobilizing Phase 1 and going right into a continuous build into Phase 2 at Port Arthur. I would also note that his team has master purchase agreements with all the key vendors in place. And there’s a lot of focus on making sure we’re sourcing the key equipment and particularly planning in advance to long lead time items. So that all goes into the box of how we manage risk to make sure that we’re delivering projects that create the right risk reward for our owners.
Anthony Crowdell: And then if I get one follow-up and I know it’s a very small part of SIP. It’s the Cimarron Wind. The company has been very successful at recycling capital and sold a renewable portfolio several years ago. Very opportunistic there. And now the company is – should we think of more winds coming on or more renewable coming on to rebuilding a renewable portfolio with SIP? And I’ll leave it there.
Jeff Martin: Yes let me provide a little bit of context for that because we’re excited about that project. Let me start Anthony with the fact that we rolled out our new corporate strategy back in 2018. And really at the heart of that strategy was a more narrow focus on two things, the first of which was building leadership and scale advantages in large economic markets; and number two, more narrowly invested in the energy value chain around T&D type of infrastructure, investments like Cimarron, where we can produce highly recurring cash flows. So when you turn that corporate strategy back to Mexico, we built a leadership position there, going back to the 1990s. It’s a market with over 130 million consumers. When I became CEO in 2018, Anthony it was the 15th largest economy in the world.
Today the IMF has it ranked as the number 12 economy in the world. And PricewaterhouseCoopers now forecasts it will be number seven in the world by 2040. It’s also our largest trading partner with an energy network that’s highly integrated with the United States. And that really plays to our strategy along the border and particularly the wind projects that you’re referencing is located right along the US border is an expansion of a very large ESJ WIM complex that we already own. It’s integrated electrically with a high-voltage system and does serve California and it’s being built using SI’s operating cash flows from Mexico. So I think the key point here is and we’ve referenced it several times in our prepared remarks, there is a very strong built-in growth story at SI based upon projects that have already taken FID and the opportunity with this land position we have adjacent to California is to efficiently and cost effectively build some additional solar and wind to serve the California market, which is integrated with Mexico and fill in and continue to improve on that recurring cash flow growth story that Justin has been talking about.
Anthony Crowdell: Great. Thanks for taking my question.
Jeff Martin: Appreciate it.
Operator: Thank you. And we have time for one more question. And our next question will come from Craig Shere from Tuohy Brothers. Your line is now open.
Craig Shere: Hi. Thanks for fitting me in. I’d like to dovetail a little on Anthony’s first question about labor and the LNG markets and kind of feed that into a broader question for Justin. In the last two, three months, we’ve seen some peer projects announce potential delays, unskilled labor issues. For the same reasons, you’ve announced increasing demand in your domestic utility networks and T&D networks from data centers to AI, but also coal-to-gas fuel switching and other. We’ve kind of seen a stabilization, and rebound in the LNG markets with some sense that this digestion period everybody was looking for in the second half maybe soft and short or not exist at all. And in this context of the last two, three months kind of change, I’m wondering if you’re seeing any change in body language and a desire to kind of seize the day on prospective off-takers?
Justin Bird: Yeah, thanks for the question, Craig. I think you talked a little bit about supply chain, about labor, but let me go to the heart of your question at the end there. So I think the LNG pause I would say, I think there was some time to react to that in the marketplace. You saw some people step back maybe with a little less desperation than they maybe had as part of the war in Ukraine. But I will say, and I think we’ve said it multiple times on this call, we are still seeing a robust commercial interest in our projects, our projects, our expansion opportunities. We’ve been a strong partner. So we’re seeing robust interest. And I’d say currently, we have teams around the world actively engaged in commercial discussions for long-term contracted volumes.
Jeff Martin: I would also add, Craig, I appreciate your question. If it’s all about seize the day, I’m betting on Justin’s team. We’re very excited about the progress we’re making on the LNG front and look forward to providing updates in the future.
Craig Shere: Great. Thank you.
Operator: Thank you. And that concludes today’s question-and-answer session. At this time, I’d like to turn the conference back to Jeff Martin for any additional closing remarks.
Jeff Martin: Let me just start by thanking everyone for joining us today. I know there were competing calls this morning, so we appreciate everyone making the time to join us. As Karen mentioned, we certainly believe we have a compelling value proposition with a strong growth and income story. Our management team is committed to the long-term success of Sempra, and we believe there’s an incredible opportunity for us to continue innovating and finding new and better ways to serve customers while also delivering strong financial returns to our owners. If there are any follow-up items, please reach out to our IR team with your questions, and we look forward to seeing you in California at AGA on May 20 and 21. This concludes our call.
Operator: Thank you for your participation. You may now disconnect.
