Sempra reaches FID for Port Arthur Phase 2

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 US$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 favourable 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.

Sempra has also 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 US$10 billion implies an equity value of US$22.2 billion and an enterprise value of US$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 CAPEX at its US utilities.

The transaction is expected to close in 2Q26 – 3Q26, 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 mi-nority 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 Jeffrey W. Martin, Chairman and CEO of Sempra. “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,” added 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 US utilities and eliminates the need for equity issuances in the previously announced 2025 – 2029 capital plan.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/24092025/sempra-reaches-fid-for-port-arthur-phase-2/