LNG

The US Department of Energy published its latest LNG monthly export data with European nations and Argentina leading the destinations list with Spain surpassing China in cargo numbers and France overtaking the UK, while Sempra’s Cameron LNG plant in Louisiana shipped the most expensive cargoes for a third month.

Sempra, the energy company with LNG assets and projects in Louisiana and Mexico as well as power and gas businesses in California and Texas, reported a jump in first-quarter revenue to $3.82 billion from $3.25Bln, though net profits fell because of one-time items and amid continued investment.

Sept 28 (LNGJ) - Sempra Energy, owner of the Cameron LNG export plant in Louisiana and the Costa Azul project in Mexico, has received all third-party approvals and satisfied all material closing conditions of the agreement to sell a 20 percent non-controlling interest in Sempra Infrastructure to US investment fund Kohlberg Kravis Roberts, now known as just KKR, for $3.37 billion in cash.

   The last move was the de-listing from the Mexican stock exchange of subsidiary, Infraestructura Energética Nova (IEnova), the owner of the Costa Azul venture and pipeline and energy assets in Mexico. The new Sempra North American LNG and gas platform called Sempra Infrastructure Partners will group the San Diego, California-based company’s subsidiaries currently held by Sempra LNG and the IEnova unit.

Sempra Energy has sold a 20 percent interest in the new business platform, Sempra Infrastructure Partners, to global equity fund Kohlberg, Kravis, Roberts (KKR) for $3.37 billion in cash.

“This transaction values Sempra Infrastructure Partners at around $25.2 billion, including expected asset-related debt at closing of $8.37Bln,” said Sempra, developer of the Cameron LNG export plant in Louisiana on the Gulf Coast and the Costa Azul project in northern Mexico.

In a series of transactions outlined at the end of 2020 that are intended to simplify Sempra Energy's non-utility infrastructure investments under one self-funding platform, the San Diego-based company combined the strengths of Sempra LNG and Sempra’s Mexican arm, IEnova.

“Over the next decade, we expect the energy markets in North America to continue to grow and become increasingly integrated,” said Jeffrey W. Martin, Chairman and Chief Executive of Sempra Energy.

“Combining our resources with KKR improves our ability to capture new investment opportunities in cleaner forms of energy and the critical infrastructure that stores and transports it,” added Martin.

The CEO explained that the transaction also sent a clear signal about the value and expected growth of its infrastructure portfolio.

“Investing in critical new energy infrastructure creates jobs, delivers reliable energy with fewer emissions and supports North America's economic recovery," said Raj Agrawal, KKR Partner and Global Head of Infrastructure.

“That is why we are excited to partner with Sempra Energy. This infrastructure platform provides a strong foundation to expand cleaner energy resources across the continent,” added Agrawal.

“Backed by strong, contractually-supported, long-term cash flows, our investment is also consistent with KKR Infrastructure's strategy to seek stable and predictable returns for our investors,” he stated.

The transaction is expected to be completed by mid-2021, subject to customary closing conditions, including consents from certain third parties and regulators.

Feb 19 (LNGJ) – IEnova, the Sempra Energy Mexican subsidiary and developer of the Costa Azul export plant, posted gross earnings for the year of more than US$1 billion. However, net profits for 2020 were lower at $461M million compared with $468M in 2019.

   IEnova said earnings benefited from the start of operations of the South Texas-Tuxpan pipeline bringing natural gas supplies from the US, partially offset by the revenue deferment at the Guayma-El Oro natural gas pipeline and lower operational results at the Termoeléctrica de Mexicali power plant. The Costa Azul LNG project on the Pacific Coast was given the go-ahead in late 2020 and is being constructed by Europe-based engineering firm Technip Energies. 

Sempra Energy’s Mexican subsidiary said a joint venture formed by the Costa Azul LNG export project, including French energy major Total, has signed a loan agreement for partial funding.

The Sempra unit, Infraestructura Energética Nova (IEnova), said the ECA Liquefaction venture had signed a five-year loan deal for an aggregate amount of up to $1.5805 billion in relation to the ECA LNG export project.

“The financing, which will not consolidate in IEnova’s balance sheet, has three tranches associated with the commitments of each joint venture partner,” explained IEnova.

Earlier, Sempra and IENova said their Costa Azul project had signed an equity investment agreement with Total, giving the French company a 16.6 percent equity stake in the first phase of Costa Azul, with Sempra and IEnova each retaining 41.7 percent ownership.

Total also has a 20-year sale and purchase agreement for around 1.7 million tonnes per annum of Costa Azul volumes.

IEnova said that financial institutions that took part in the Costa Azul project financing for its tranche were the Bank of Nova Scotia, Sumitomo Mitsui Banking Corp. of Japan, Spanish bank BBVA Securities, and Banco Nacional de México with its Banamex financial group.

Technip Energies, the LNG and energy project contract division of TechnipFMC, the Franco-US company, received a notice to proceed for its Costa Azul LNG engineering, procurement and construction contract following the positive final investment decision taken by Sempra and its partners in November 2020.

Technip said it had been involved in Costa Azul, an existing LNG import terminal, since 2017, including the delivery of the front-end engineering and design for the transformation into an export plant.

As well as owning Costa Azul through IEnova, Sempra also operates the Cameron LNG plant in Louisiana and is also developing the Port Arthur liquefaction facility in Texas.

Sempra is also currently arranging various transactions Energy under which its publicly-held stake in IEnova would be exchange for Sempra Energy shares.

Sempra owned over 66 percent of IEnova and made a tender offer for the outstanding shares listed on the Mexican stock exchange, the Bolsa Mexicana de Valores (BMV), to be swapped for Sempra Energy shares.

The Mexican share deal was necessary to clear the way for the pooling of Sempra’s LNG and natural gas and renewable assets into one company to be called Sempra Infrastructure Partners.

Sempra said it expected all transactions to be completed in the first quarter of 2021.

After this time, Sempra’s LNG portfolio would be united under one company with potential total production volumes of 45 MTPA.

Sempra Energy said it would exchange the publicly-held stake in its Mexican subsidiary and LNG plant developer IEnova for Sempra Energy shares and form a new North American infrastructure company grouping Cameron LNG in Louisiana, Costa Azul on Mexico’s Pacific Coast and the Port Arthur LNG project in Texas as well as other assets including natural gas pipelines.

Sempra currently owns 66.43 percent of IEnova, whose full name is Infraestructura Energética Nova, and is making a tender offer for the outstanding shares listed on the Mexican stock exchange, the Bolsa Mexicana de Valores (BMV) to be swapped for Sempra Energy shares.

The transaction for IEnova shares in Mexico is for the 29.83 percent, which were sold in an initial public offering in March 2013.

The IEnova IPO had been for 218 million shares which at the time raised the equivalent in pesos of $567 million.

The new Mexican share deal is necessary to clear the way for the pooling of Sempra’s LNG and natural gas and renewable assets into one company to be called Sempra Infrastructure Partners.

The San Diego, California-based company added that it would also sell a non-controlling interest in the Sempra Infrastructure Partners unit to help fund growth.

Sempra said it expected all transactions to be completed in the first quarter of 2021.

“The LNG portfolio consists of approximately 45 million tonnes per annum of LNG export capacity in development, construction or operation on the North American Pacific and Gulf Coasts,” said Sempra, in reference to Costa Azul, Cameron and the Port Arthur project.

With the IEnova shares of Mexican investors being exchanged for shares in Sempra, the US parent company Sempra Energy would be listed on the Mexican exchange in place of IEnova.

“We are excited about the announcement. In large measure, it is because we believe Sempra Infrastructure Partners is well positioned to be a leader in the global energy transition,” said Jeffrey W. Martin, Chairman and Chief Executive of Sempra Energy.

“By focusing on the critical need for new energy infrastructure right here in North America, both Sempra LNG and IEnova have created a significant pipeline of development projects that are expected to provide differentiated growth for decades to come,” added Martin.

“More importantly, this will provide an improved platform for innovation and potential new investments in renewables, hydrogen, energy storage and carbon sequestration," he added.

Martin said he was “especially excited” to be listing Sempra Energy shares on the BMV.

“Many of Mexico's most successful companies are listed there, and our plans to list our shares locally is a positive affirmation of our commitment to Mexico and desire to continue investing in the country and improving economic prosperity,” Martin explained.

“As part of Sempra Energy's family of companies, IEnova has delivered critical energy infrastructure to the country of Mexico for over two decades, supporting economic growth and the health and wellbeing of millions,” he stated.

In its stock-for-stock offer Sempra tendered for all the outstanding shares of IEnova at an exchange ratio of 0.0313 shares of Sempra Energy common stock for each ordinary share of IEnova.

Sempra Energy presented a non-binding offer to IEnova consisting of a fixed exchange ratio implying a price of 82 Mexican pesos ($4.10) per IEnova ordinary share, representing premiums of 11.6 percent and 22.6 percent over IEnova's 30-day and 90-day volume-weighted average stock prices.

To facilitate the exchange of the two sets of shares, Sempra Energy also filed a preliminary prospectus and exchange offer documents with the Mexican National Banking and Securities Commission and the BMV.