Sempra shares surge 5% after $10B stake sale in infrastructure unit

US electric and gas utility company Sempra (NYSE: SRE) said on Tuesday it would sell a 45% equity stake in its Sempra Infrastructure Partners unit to a consortium led by KKR and Canada Pension Plan Investment Board (CPP Investments) for $10 billion, while also approving a $14 billion expansion of its Port Arthur LNG project in Texas.

The announcements pushed Sempra’s shares up 5.37% to a nearly seven-month high of $86.80.

At the time of writing, the stock was trading at $85.43, up 3.68%.

$10 Billion stake sale to KKR and CPP Investments

The transaction implies an equity value of $22.2 billion and an enterprise value of $31.7 billion for Sempra Infrastructure Partners, which owns liquefied natural gas (LNG) assets along with pipeline and storage infrastructure.

Once completed, the KKR-led consortium will hold 65% of Sempra Infrastructure, while Sempra will retain 25% and Abu Dhabi Investment Authority will maintain its 10% stake.

The deal is expected to close between the second and third quarters of 2026, subject to regulatory approvals.

For Sempra, the sale is part of a broader capital recycling strategy.

The company said the transaction will strengthen its credit profile, reduce its exposure to non-utility assets, and eliminate the need to issue new common stock to fund its $56 billion capital plan for 2025–2029.

Additionally, the deal is projected to add about $0.20 to annual earnings per share starting in 2027.

Private equity firms have been increasingly active in energy infrastructure, driven by rising electricity demand from AI data centers and growing US consumption.

If completed, this would be one of the largest private equity-led infrastructure transactions in North America this year.

$14 Billion expansion of Port Arthur LNG

Alongside the stake sale, Sempra Infrastructure Partners reached a final investment decision for Phase 2 of its Port Arthur LNG project.

The $14 billion expansion will add two liquefaction trains, one LNG storage tank, and associated facilities, increasing capacity by 13 million tonnes per year.

Commercial operations are scheduled for 2030 and 2031.

The expansion is backed by a $7 billion minority equity investment led by Blackstone Credit & Insurance, alongside KKR, Apollo-managed funds, and Goldman Sachs Alternatives.

Sempra Infrastructure Partners will retain a 50.1% stake in the project, ensuring majority control.

Engineering and construction will be led by Bechtel Energy, which also oversaw Phase 1.

Sempra has already secured offtake agreements with ConocoPhillips, EQT, JERA, and its own infrastructure unit, providing revenue visibility for the new capacity.

Strategic shift toward regulated utilities

Sempra’s moves underscore a strategic focus on simplifying its business and concentrating on regulated utilities, which the company said will account for about 95% of future earnings.

By recycling capital from its infrastructure assets, Sempra is positioning itself as a leading US utility growth company.

“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 Jeffrey W. Martin, chairman and CEO of Sempra.

Raj Agrawal, Global Head of Real Assets at KKR, emphasized the growth potential of the partnership, noting that the consortium is “excited to grow this strategic partnership and pleased to welcome CPP Investments alongside us as we work to expand Sempra Infrastructure Partners’ assets to help meet growing global demand for energy.”

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