Blackstone and KKR Lead $10B Sempra Energy Infrastructure Deal

Global energy investors fund Sempra’s utility expansion as KKR consortium acquires major infrastructure assets for domestic grid modernization

Key Takeaways

• $10 billion infrastructure stake sale – Sempra Energy sells 45% of its infrastructure division to KKR-led consortium, valuing the unit at $22.2 billion equity value in one of the year’s largest US energy transactions
• $7 billion LNG project financing secured – Blackstone leads consortium investing in Port Arthur LNG Phase 2, doubling Texas facility’s export capacity to 26 million tons annually by 2031
• $56 billion utility expansion funded – Sale proceeds enable Sempra’s five-year capital program focused on Texas and California grid modernization without requiring customer rate increases

Introduction

Sempra Energy completes a transformative $10 billion transaction that reshapes its business model and advances America’s position in global energy markets. The utility giant sells a 45% stake in Sempra Infrastructure Partners to a KKR-led consortium including Canada Pension Plan Investment Board, reducing its ownership to 25% while unlocking substantial capital for domestic grid expansion.

The deal establishes KKR as the majority stakeholder with 65% ownership through its $90 billion global infrastructure strategy. This transaction coincides with a final investment decision on the $14 billion Port Arthur LNG Phase 2 project in Texas, securing $7 billion in financing from Blackstone, Apollo, and Goldman Sachs.

Key Developments

The transaction values Sempra Infrastructure Partners at $22.2 billion in equity and $31.7 billion in total enterprise value. KKR’s consortium acquisition reduces Abu Dhabi Investment Authority’s stake to 10%, creating a new ownership structure focused on institutional investment backing.

Sempra structures the payment schedule across multiple years, receiving 47% of proceeds at closing, 41% by year-end 2027, and the remaining 12% approximately seven years post-closing. The deal requires regulatory approvals and targets completion in the second or third quarter of 2026.

Port Arthur LNG Phase 2 moves forward simultaneously with construction beginning soon on two new liquefaction trains. The facility secures 20-year offtake agreements with ConocoPhillips, EQT, Japan’s JERA, and Sempra Infrastructure Partners, matching the first phase’s 13 million tons annual capacity.

Market Impact

Sempra shares surge as much as 5.4% in New York trading following the announcement. The transaction represents one of the largest private credit investments ever completed for a project under construction.

The deal forms part of a broader $17 billion investment surge into US natural gas assets this year. Blackstone’s $7 billion financing commitment stands as a landmark transaction in energy project finance, demonstrating institutional appetite for LNG infrastructure investments.

Analysts view the move positively for Sempra’s credit profile, addressing concerns over the company’s $33.57 billion debt load and recent financial pressures including a $1.49 billion net loss in 2024 and 26.63% stock decline.

Strategic Insights

The transaction enables Sempra’s strategic shift toward regulated utility operations while maintaining exposure to high-growth LNG markets. The company allocates $36 billion toward Oncor, its Texas subsidiary, for grid modernization supporting increased demand from Permian and Delaware Basin operations.

Sempra eliminates the need for future equity issuances under its $48 billion capital program for 2025-2029, avoiding customer rate increases through external financing. The structure allows the company to retain operational control while mitigating financial risk through minority equity partnerships.

The deal reflects broader industry consolidation as utilities partner with institutional investors to finance large-scale infrastructure projects. Private equity’s growing influence in energy infrastructure signals confidence in long-term demand for both traditional and renewable energy assets.

Expert Opinions and Data

Sempra CEO Jeffrey Martin emphasizes the transaction’s role in advancing the company’s capital recycling program and transition to a leading US utility growth business. Martin highlights the strategic partnership extension with KKR to enhance America’s global LNG export leadership position.

The timing aligns with global energy security concerns and growing Asian market demand for US LNG exports. Saudi Aramco’s earlier interest in Sempra assets and its preliminary 20-year LNG procurement agreement demonstrate international confidence in Port Arthur’s expansion plans.

Industry analysts note the deal balances near-term financial health with gradual decarbonization efforts. While most capital targets regulated utility infrastructure, Sempra advances renewable projects including the 320MW Cimarrón Wind facility in Baja California, Mexico, launching in 2026.

Conclusion

Sempra’s dual transaction strategy positions the company for sustainable growth while addressing immediate financial pressures. The infrastructure stake sale provides capital flexibility for domestic utility expansion, while LNG project financing secures America’s export capacity leadership.

The deal demonstrates successful risk mitigation through strategic partnerships, allowing Sempra to focus on regulated utility returns while maintaining exposure to global energy markets. This approach reflects industry-wide trends toward infrastructure modernization and institutional investment collaboration in energy transition projects.