Sempra Advances Capital Recycling Strategy with Strategic Asset Sales
Sempra has announced a series of strategic actions aimed at streamlining its business portfolio and reinforcing its commitment to recycling capital to drive sustainable growth in its Texas and California utilities. This initiative aligns with the company’s long-term vision of enhancing shareholder value while maintaining financial strength. As part of this effort, Sempra plans to divest certain energy infrastructure assets in Mexico and sell a minority stake in Sempra Infrastructure Partners (Sempra Infrastructure). The proceeds from these transactions will be reinvested into the company’s five-year capital program, with a concentrated focus on its core U.S. utilities.
Commitment to Growth and Financial Stability
Jeffrey W. Martin, chairman and CEO of Sempra, emphasized the company’s ongoing efforts to optimize its portfolio to support expansion in key utility markets while sustaining a strong financial foundation.
“At Sempra, we continually assess opportunities to realign our portfolio to enhance the growth of our Texas and California utilities while preserving a strong balance sheet,” said Martin. “With today’s announcement, we believe we can successfully achieve both goals as we continue driving long-term value for our shareholders. Moreover, these actions are designed to simplify our business structure and reduce reliance on future issuances of common equity to finance our five-year capital plan.”
Divestiture of Energy Assets in Mexico
Sempra Infrastructure is preparing to sell Ecogas México, S. de R.L. de C.V. (Ecogas), a subsidiary holding three utility franchises that provide natural gas distribution services in key regions across Mexico, including Mexicali, Chihuahua, and La Laguna-Durango. Ecogas operates the fifth-largest distribution network in Mexico, managing over 5,000 kilometers of pipelines that supply natural gas to more than 600,000 residential, commercial, and industrial customers.
Serving the northern region of Mexico, Ecogas plays a crucial role in supporting both local economic growth and cross-border trade. The continued industrial expansion in these regions, driven by nearshoring strategies and the presence of various manufacturing industries, presents a favorable environment for natural gas distribution. The divestiture of Ecogas is expected to unlock capital that will be reinvested into Sempra’s regulated U.S. utility businesses, where the company sees strong long-term growth potential.
Monetizing a Minority Stake in Sempra Infrastructure
In addition to selling its Mexican assets, Sempra is initiating a process to sell a minority interest in Sempra Infrastructure, a leading energy infrastructure platform in North America. This division holds a dominant market position in liquefied natural gas (LNG) assets, as well as pipeline and storage infrastructure.
This move follows two prior divestitures of non-controlling interests in Sempra Infrastructure. In 2021, the company sold a 20% stake to Kohlberg Kravis Roberts & Co. L.P. for an implied equity value of approximately $16.9 billion. A subsequent 10% stake was sold in 2022 to the Abu Dhabi Investment Authority at an implied equity valuation of around $17.9 billion. These transactions helped unlock value from the LNG portfolio while retaining majority control.
Since those transactions, Sempra Infrastructure has significantly increased its market value, primarily driven by the continued expansion of its LNG business. This includes strategic projects on both the Pacific and Gulf Coasts of North America, which offer key geographic advantages.
For example, the Energía Costa Azul LNG Phase 1 project remains on track to commence commercial operations in the spring of 2026. Additionally, construction at Port Arthur LNG Phase 1 is progressing as planned, with Trains 1 and 2 expected to be operational in 2027 and 2028, respectively. These projects are set to enhance North America’s role as a major LNG exporter, further reinforcing Sempra Infrastructure’s market position.
Future Expansion Plans and New Investment Opportunities
Sempra Infrastructure continues to advance the development of Port Arthur LNG Phase 2, which has attracted significant commercial interest. The company is actively engaged in discussions with globally recognized firms regarding potential partnerships for the Phase 2 project. Notably, a non-binding Heads of Agreement has been reached with a subsidiary of Saudi Aramco, which includes an LNG offtake arrangement and a proposed equity investment. Additionally, a fixed-price engineering, procurement, and construction contract has been signed with Bechtel Energy, a leading engineering firm.
The final investment decision for Port Arthur LNG Phase 2 is expected in 2025, contingent on securing definitive commercial agreements, obtaining necessary permits, and arranging project financing. This expansion aligns with Sempra’s long-term strategy to develop world-class LNG infrastructure that supports growing global demand.
“Sempra Infrastructure is pursuing a series of exciting LNG growth opportunities that will further strengthen America’s position as a global leader in LNG exports,” said Justin Bird, CEO of Sempra Infrastructure. “By focusing on the critical need for new energy infrastructure in North America, our pipeline of development projects will provide benefits to a broad customer base and offer differentiated long-term growth.”
Driving Long-Term Shareholder Value
The asset sales announced by Sempra today are part of a broader set of value creation initiatives planned for 2025. These initiatives aim to enhance long-term value for shareholders, employees, customers, and other stakeholders. The company’s key objectives include:
- Divesting Non-Core Assets – Selling selected infrastructure holdings to recycle capital into high-growth investments in Texas and California utilities.
- Strengthening Financial Position – Improving balance sheet flexibility while efficiently funding growth and ensuring the affordability of services.
- Enhancing Shareholder Returns – Providing greater visibility into consistent earnings growth, cash flow improvements, and long-term value creation.
By strategically reallocating capital, Sempra aims to drive sustainable, high-quality growth while reinforcing the financial resilience of its business. The expected proceeds from these sales will help finance critical investments in regulated infrastructure projects, positioning the company to capitalize on future growth opportunities in its core U.S. markets.
Expected Timeline and Completion Considerations
The transactions announced today are expected to be completed within the next 12 to 18 months. However, their finalization is subject to several conditions, including:
- Reaching agreement on acceptable pricing and transaction terms
- Securing necessary regulatory approvals
- Finalizing definitive contracts
- Other customary closing conditions
Upon completion, these transactions are expected to be accretive to Sempra’s earnings-per-share forecast while also contributing to an improved credit profile.
