- Agreement to Sell 45% of Sempra Infrastructure Partners for $10 billion in cash
- Accretive Transaction Improves Sempra's Financial Strength
- Efficiently Funds 2025–2029 Capital Plan without Equity Issuances
- Reached Final Investment Decision for Port Arthur LNG Phase 2
- Hosting Conference Call at 11 a.m. EST
Sempra has announced several strategic actions that advance Sempra's corporate strategy. The company is executing on five value creation initiatives designed to simplify Sempra's business model, improve financial performance and reduce risk. The company expects these initiatives to strengthen its ability to deliver improved earnings growth while driving enhanced benefits for customers and communities across its service territories.
'The transactions announced today further Sempra's corporate strategy by advancing the company's capital recycling program and transition to a leading U.S. utility growth business,' said Jeffrey W. Martin, chairman and CEO of Sempra.
Sale of Equity Stake in Sempra Infrastructure Partners
Sempra announced that it has agreed to sell a 45% equity interest in Sempra Infrastructure Partners, one of North America's leading energy infrastructure platforms, to affiliates of KKR, a leading global investment firm, with Canada Pension Plan Investment Board (CPP Investments).
Subject to adjustments, the transaction proceeds of $10 billion implies an equity value of $22.2 billion and an enterprise value of $31.7 billion for Sempra Infrastructure Partners.
Before adjustments, Sempra is expected to receive 47% of the cash at close, 41% by year-end 2027 and the balance approximately seven years after closing. This schedule helps Sempra generate attractive post-closing interest income as it efficiently reinvests proceeds over time in capital expenditures at its U.S. utilities.
The transaction is expected to close in Q2 – Q3 2026, subject to necessary regulatory and other approvals and closing conditions.
Upon closing, a KKR-led consortium will become the majority owner of Sempra Infrastructure Partners, holding a 65% equity stake, while Sempra will retain a 25% interest alongside Abu Dhabi Investment Authority's (ADIA) existing 10% stake. Under the terms of the agreement, Sempra and ADIA will have certain minority rights in Sempra Infrastructure Partners.
'The transaction announced today underscores our commitment to extend our strategic partnership with KKR, with whom we have a shared vision of improving America's position as a global leader in LNG exports,' said Martin. 'It also directly supports our five value creation initiatives designed to simplify our business, efficiently fund strong utility growth in Texas and California and improve our financial strength.'
'Over the past four years, we have developed a close relationship with the Sempra Infrastructure Partners team and a deep understanding of their business,' said Raj Agrawal, Global Head of Real Assets at KKR. 'We are excited to grow this strategic partnership and are pleased to welcome CPP Investments alongside us as we work to expand Sempra Infrastructure Partners' assets to help meet growing global demand for energy.'
The transaction also helps strengthen Sempra's credit profile, deconsolidates Sempra Infrastructure Partners, improves Sempra's business mix with a goal of approximately 95% earnings from regulated U.S. utilities and eliminates the need for equity issuances in the previously announced 2025-2029 capital plan.
Key expected benefits from the transaction announced today:
- Sharpens focus on building a leading U.S. utility growth business
- Reduces business risk by lowering exposure to non-utility investments
- Strengthens balance sheet
- Improves credit profile and FFO-to-debt
- Adds five-year average annual accretion of $0.20 of earnings per common share (EPS) starting in 2027
- Highlights value of LNG franchise
- Eliminates planned common equity needs in previously announced 2025 – 2029 capital plan
Port Arthur Phase 2 Final Investment Decision
Sempra also announced today that Sempra Infrastructure Partners has reached a final investment decision to advance the development, construction and operation of Port Arthur LNG Phase 2. This new phase will include two natural gas liquefaction trains, one LNG storage tank and associated facilities with a nameplate capacity of approximately 13 million tonnes per annum (Mtpa) of U.S.-produced LNG. Incremental project capital expenditures at Phase 2 are estimated at $12 billion, plus an approximate $2 billion payment for shared common facilities, with commercial operations expected in 2030 and 2031 for Trains 3 and 4, respectively.
Funding for Phase 2 is supported by an equity investment led by Blackstone Credit & Insurance, together with an investor consortium including KKR, Apollo-managed funds and Private Credit at Goldman Sachs Alternatives. Together these investors have acquired a 49.9% minority equity interest for $7 billion. Sempra Infrastructure Partners has retained a 50.1% majority stake in the project.
In addition to securing 100% equity financing, Sempra Infrastructure Partners has contracted with global engineering, construction and project management firm Bechtel Energy Inc., which has received full notice to proceed for the project. Bechtel's continued involvement from Phase 1 into Phase 2 is expected to drive favorable economics and help mitigate execution risk by leveraging efficiencies and learnings across phases.
Phase 2 is subscribed with long-term offtake under 20-year sales and purchase agreements with strategic partner ConocoPhillips as anchor, and high-quality counterparties EQT, JERA Co. Inc. and Sempra Infrastructure Partners. Consistent with industry practice, Sempra Infrastructure Partners expects to enter into additional offtake agreements from time to time to enhance the overall economic value of the project.
Earnings Guidance
Sempra is updating its full-year 2025 EPS guidance range prepared in accordance with Generally Accepted Accounting Principles (GAAP) to $3.29 to $3.69, reflecting actual results through the second quarter and certain estimated tax impacts related to the equity sale transaction announced today that are expected to be recognized in the third quarter, and affirming its full-year 2025 adjusted EPS guidance range of $4.30 to $4.70. With the Sempra Infrastructure Partners equity sale transaction expected to close in Q2 — Q3 of 2026, Sempra is affirming its full-year 2026 adjusted EPS guidance range of $4.80 to $5.30. The company is also affirming its guidance to the high-end or above its projected long-term EPS compound annual growth rate of 7% to 9% for 2025 through 2029. Sempra intends to provide an update to its five-year capital plan during its fourth-quarter earnings call in February 2026, subject to completion of the base rate review at Oncor.
Non-GAAP Financial Measures
Non-GAAP financial measures include Sempra's adjusted EPS guidance ranges and net debt, which is used in the calculation of implied enterprise value. See Table A for additional information regarding these non-GAAP financial measures.
Conference Call Information and Additional Details
Sempra is holding a conference call to discuss these transactions today, Sept. 23 at 11 a.m. EST with the company's senior management. Access is available by logging onto the Investors section of the company's website, sempra.com/investors. Supplemental materials that will be discussed during the call are available at the same website location where you can find a more detailed description of the anticipated transaction proceeds and the closing and other adjustments.
A replay of the webcast will be available on Sempra's website a few hours after the completion of the broadcast.
Transactions Advisors
BofA Securities is serving as financial advisor to Sempra on the referenced Sempra Infrastructure Partners equity sale transaction, while Sullivan & Cromwell LLP is serving as legal advisor to Sempra on both transactions described herein.
Citi is serving as financial advisor and Simpson Thacher is serving as legal advisor to KKR. Kirkland & Ellis LLP is serving as legal advisor to CPP Investments.
For the Port Arthur Phase 2 project, Goldman Sachs & Co. LLC acted as exclusive Structuring Agent for Sempra Infrastructure Partners. Sullivan & Cromwell LLP and Baker Botts LLP served as legal counsel to Sempra Infrastructure Partners.
About Sempra
Sempra is an energy infrastructure company with one of the largest energy networks in North America. Through its operations in California, Texas and beyond, Sempra is electrifying and improving the energy resilience of some of the world's most significant economic markets and delivering everyday energy to nearly 40 million consumers. The company is recognized as a leader in responsible business practices and for its high-performance culture focused on safety and operational excellence, as demonstrated by Sempra's inclusion in the Dow Jones Sustainability Index North America. More information is available at sempra.com and on social media @Sempra.
Source: Sempra
