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(Sharecast News) - Shares in Sempra were advancing on Tuesday after the California-based public utility company announced a $10bn deal to sell 45% of its energy infrastructure unit and advance the next stage of its Port Arthur LNG plant in Texas worth $14bn.
"The transactions announced today further Sempra's corporate strategy by advancing the company's capital recycling programme and transition to a leading US utility growth business," said Sempra's chair and chief executive Jeffrey Martin in a statement.
The company said the sale of a 45% equity interest in Sempra Infrastructure Partners to affiliates of KKR will sharpen its focus on building a leading US utility growth business, while lowering business risk by cutting its exposure to non-utility investments.
The deal will leave KKR with a 65% stake in SIP, with Sempra keeping a 25% interest and Abu Dhabi Investment Authority retaining its 10% stake.
The sale is expected to help strengthen Sempra's credit profile and improve business mix as the company aims for 95% of earnings from regulated US utilities. It also eliminates the need for equity issuances in its previously announced 2025-2029 capital plan, the company said.
At the same time, Sempra reached the final investment decision on phase two of the Port Arthur LNG project, which includes two natural gas liquefaction trains, one LNG storage tank and associated facilities with a nameplate capacity of approximately 13m tonnes per annum.
The Port Arthur LNG facility is a natural gas liquefaction and export terminal in Jefferson County with direct access to the Gulf of Mexico via the Sabine-Neches ship channel. The two natural gas liquefaction trains are expected to start commercial operation in 2027 and 2028.
Sempra is part-funding the project by selling 49.9% to Blackstone Credit & Insurance and a KKR-led consortium for $7bn.
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