Sempra has announced strategic actions to advance its capital recycling programme, focusing on its Texas and California utilities.
The company aims to sell certain energy infrastructure assets in Mexico and a minority stake in Sempra Infrastructure Partners (Sempra Infrastructure).
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The divestments are part of a broader strategy consisting of five value creation initiatives for 2025, designed to enhance long-term value for shareholders, employees, customers and other stakeholders.
Following completion, these transactions are expected to be accretive to the company’s earnings-per-share forecast and improve credit.
Completion of the transactions is anticipated within the next 12–18 months, subject to agreements, approvals and other considerations.
Proceeds from the divestitures are expected to be recycled into the company’s five-year capital campaign.
Sempra Infrastructure targets the sale of Ecogas México (Ecogas), which has three utility franchises and offers natural gas distribution services in the Mexicali, Chihuahua and La Laguna-Durango regions of Mexico.
It is claimed to be Mexico’s fifth-largest distribution network, with more than 5,000km of pipelines providing natural gas to more than 600,000 consumers.
Sempra Infrastructure CEO Justin Bird said: “At Sempra Infrastructure, we are pursuing a series of exciting LNG [liquefied natural gas] growth opportunities that are expected to further America’s position as a global leader in LNG exports.
“By focusing on the critical need for new energy infrastructure in North America, our company’s pipeline of development projects is expected to provide benefits to a broader base of customers and differentiated growth for decades to come.”
Sempra plans to sell a minority interest in Sempra Infrastructure, a North American energy infrastructure platform.
The proposed sale comes after Sempra’s sale in 2021 of a 20% non-controlling stake, which was sold to Kohlberg Kravis Roberts & Co. for an implied equity value of around $16.9bn.
This was succeeded by a second transaction in 2022, where a 10% non-controlling interest was sold to the Abu Dhabi Investment Authority for an implied equity value of around $17.9bn.
Since then, Sempra Infrastructure is stated to have further enhanced its market value by expanding its LNG franchise, benefitting from strategic geographic positions along the Pacific and Gulf coasts of North America.
The company stated that the Energía Costa Azul LNG phase one project is on track to begin commercial operations in the spring of 2026. Meanwhile, construction of Port Arthur LNG Phase 1 is progressing as planned, with Trains 1 and 2 set to be operational in 2027 and 2028, respectively, all while staying within budget.
According to the company, the development of Port Arthur LNG phase two is advancing and has garnered considerable commercial interest.
The company is currently engaged in active discussions with leading global operators regarding their involvement in the phase two project.
This initiative is supported by a non-binding heads of agreement for LNG offtake and a proposed equity investment from a subsidiary of Saudi Aramco, along with a fixed-price engineering, procurement and construction contract with Bechtel Energy.
The company aims to reach a final investment decision in 2025, contingent upon the finalisation of commercial agreements, acquisition of necessary permits, securing financing and other critical factors.
Sempra CEO and chairman Jeffrey W. Martin said: “At Sempra, we continually review opportunities to realign our portfolio to support the growth and expansion of our Texas and California utilities, while also maintaining a strong balance sheet.
“With today’s announcement, we believe we can successfully accomplish both objectives as we continue our work to drive enhanced long-term value for our shareholders. Further, these actions are designed to advance our company’s broader effort to simplify the business and minimise reliance on future issuances of common equity to fund the company’s five-year capital plan.”
