Sempra Energy May Shed Its Trading Unit

Sempra Energy, the largest U.S. natural gas utility operator, will consider spinning off or selling its commodities-trading unit to become more attractive to investors, Chief Executive Donald Felsinger said.

Any decision is at least two years away, Felsinger said in an interview. By that time, investments in liquefied natural gas terminals and pipelines that Sempra is building will begin generating cash and the San Diego-based company will have more options, he said.

Investors who want the predictable returns of a utility may be avoiding Sempra, owner of Southern California Gas Co. and San Diego Gas & Electric Co., because of concern that profit from trading will falter. That causes frustration, Felsinger said. The company’s 29 consecutive quarters of profit from the commodities business justify a higher share price, he said.

The question in 2008 will be, “Are the sum of the parts worth less or more than what’s reflected in our stock price?” said Felsinger, 58, who joined the company in 1972 and became chairman and CEO this year. Options include an initial public offering or spinoff of the unit or teaming with another company, he said. “Everything’s on the table.”

Shares of Sempra rose 28 cents Thursday to $43.65.