Thread: CA. Sempra signs deals with China for LNG

Sempra signs deals with China for LNG, largest electric company in Peru

[The $10 billion Cameron LNG facility in Hackberry, Louisiana. San Diego-based Sempra Energy indirectly owns 50. 2 percent of the project, partnering with French energy giant Total, Mitsui of Japan and a Japanese investment group that includes Mitsubishi. (Sempra Energy)


The San Diego energy giant to get $3.59 billion for Luz del Sur

By ROB NIKOLEWSKI
SEP. 30, 2019 1:30 PM


San Diego-based Sempra Energy announced a pair of deals Monday with China — one regarding a potential agreement concerning Sempra’s growing liquefied natural gas, or LNG, ambitions and another dealing with the sale of the largest electric company in Peru for $3.59 billion.

Sempra announced a memorandum of understanding with China Three Gorges (CTG) Corporation, China’s massive state-owned power company, regarding potential cooperation in supplying LNG to support China’s growing demand for natural gas. Finalization of a definitive agreement with subsidiary Sempra LNG remains subject to a host of conditions and other factors.

“This initial agreement with CTG represents an opportunity to support strong growth in natural gas demand in Asia, with future expansions of our LNG projects right here in North America,” Sempra CEO Jeff Martin said in a statement.

Sempra recently opened the sprawling Cameron LNG facility on the Louisiana Gulf Coast that, through the liquefaction process, takes domestically produced natural gas and cools it to minus-260 degrees Fahrenheit, where it can then be loaded onto specially made cargo tanks on double-hulled ships and taken to destinations around the world.

Imports to Asia make up a large percentage of the global LNG market and China, eager to transition from coal to cleaner-burning natural gas, has quickly emerged as a prime destination.

Sempra indirectly owns 50. 2 percent of Cameron and has plans to expand its Cameron operations as well as constructed another LNG facility near Port Arthur, Texas. The company is also considering adding an export component to an already existing LNG facility on the west coast of Mexico that is operated by its IEnova subsidiary that could ship LNG directly to Asian markets without having to go through the Panama Canal.

At the same time, Sempra announced selling its interests in Peruvian energy businesses to China Yangtze Power International for $3.59 billion, subject to closing adjustments for working capital and net indebtedness.

The sale price includes Sempra’s 83.6 percent stake in Luz del Sur, the largest electric company in Peru. The sale includes Sempra’s interest in an electric construction and infrastructure services company and Luz del Sur’s generation business.

[COLOR=var(--primaryTextColor)]Sempra Energy announced it has sold its 83.6 percent stake in Luz del Sur, the largest electric company in Peru, to China Yangtze Power International for $3.59 billion. (Photo by Sempra Energy)

The sale is expected to be completed in the first quarter of next year, subject to customary closing conditions and approval from entities that include Peru’s antitrust authority.

Martin said the money from the sale will go to “strengthen our balance sheet and meet the growing capital needs of our core utilities in California and Texas.”

Sempra is the parent company of San Diego Gas & Electric and Southern California Gas Company.

Last year, Sempra bought 80 percent of Oncor, the largest utility in Texas, for $9.45 billion.

Oncor has since spent $1.275 billion to acquire Dallas-based electric transmission utility business InfraREIT in Central, North and West Texas.

The sale of Sempra’s South American assets is part of a larger effort to focus on its holdings and investments in North America.

Sempra is actively looking to sell the company’s 100 percent stake in electric business holdings in Chile, including Chilquinta Energía, the third-largest electricity distributor in Chile that also operates and develops transmission lines. Sempra officials say they expect to announce an agreement in the fourth quarter of this year.

Wall Street reacted favorably to the deals with China, as Sempra stock finished the trading day up 2.2 percent to $147.61.

The agreements come amid heightened tensions between the Trump administration and China’s government.

“I don’t know if that’s the calculus (for Sempra) or not, to be honest” said Andy Smith, a senior analyst who follows utilities for Edward Jones. “These are long-term arrangements. The current administration is there for another year, maybe more, we don’t know. I think they’re thinking well out beyond this current administration with these arrangements.”

With more than $60 billion in total assets reported in 2018, Sempra Energy’s companies employ more than 20,000 people and serve a customer base of about 40 million worldwide.

https://www.sandiegouniontribune.com...ompany-in-peru

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