HOUSTON, May 13 (Reuters) - Sempra LNG is

revisiting its selection of Bechtel to build its Cameron LNG

expansion project in Louisiana due to rising construction costs,

two people familiar with the matter told Reuters.

The Sempra-Bechtel pricing dispute reflects a broader hike

in construction and labor costs that are affecting several U.S.

liquefied natural gas (LNG) export projects under development

and threaten to further delay others.

Sempra ( SRE ) "has gone back out for an EPC (engineering

procurement and construction) contractor for its expansion

project," one of the people familiar with the matter said.

"High demand for skilled labor for plant construction is

causing costs to rise and making some projects too expensive to

build," the person added.

Sempra LNG operates Cameron, the third largest U.S. LNG

export plant, and is constructing facilities in Mexico and Texas

in addition to pursuing the expansion of the Louisiana plant.

Cameron LNG Phase 2, a venture between affiliates of Sempra

LNG, TotalEnergies, Mitsui ( MITSF ), and Japan LNG

Investment LLC, aims to expand the capacity of the three trains

at its 12 million metric tons per annum (MTPA) facility and add

a fourth.

Sempra LNG CEO Justin Bird had told Wall Street analysts in

March that it was "working with Bechtel on value engineering.

And at this stage, we feel it's best to continue those efforts

while evaluating other potential EPC contractors."

Bechtel Corp's Bechtel Energy had built the first phase of

the Cameron plant, Sempra's ( SRE ) first LNG facility, and is building

the company's newest project, the Port Arthur LNG plant in

Texas.

This month, however, Bird did not mention Bechtel in remarks

on the Cameron expansion, saying only it was working with

unnamed partners to "optimize cost through value engineering."

Sempra ( SRE ) declined to comment on the status of its Cameron

LNG construction contract.

Paul Marsden, the president of Bechtel Energy, also declined

to comment on its status.

"There's no doubt that the whole industry is feeling

inflationary pressures. We need to actively forecast and manage

labor availability and supply chain like never before," he told

Reuters via email.

Last week, the Golden Pass LNG joint venture in Louisiana

acknowledged a dispute with one of its builders. It has delayed

the project startup into 2025.

Sempra ( SRE ) last year said it hoped to give the Cameron expansion

project a financial greenlight in 2024. It subsequently pushed

back the decision until the first half of 2025.