ArcLight completes buyout of Sempra Energy’s non-utility U.S. natural gas storage facilities


ArcLight Capital Partners has closed its previously announced acquisition of Sempra Energy‘s non-utility U.S. natural gas storage facilities. The transaction was for $328 million in cash. Wells Fargo Securities LLC provided financial advice to Sempra Energy on the transaction while Jones Day provided legal advice. Based in San Diego, Sempra Energy is an energy services holding company.

PRESS RELEASE

SAN DIEGO, Feb. 7, 2019 /PRNewswire/ — Sempra Energy (NYSE: SRE) today announced that it has completed the sale of its non-utility U.S. natural gas storage facilities to an affiliate of ArcLight Capital Partners (ArcLight) for $328 million in cash, subject to customary post-closing adjustments. ArcLight’s affiliate Enstor Gas will operate the facilities going forward.

“With the sale of these assets, we can reallocate capital toward growing our core electric and natural gas infrastructure businesses,” said Joseph A. Householder, president and chief operating officer of Sempra Energy. “We are focused on expanding our leadership position in the most attractive markets as we strive to become North America’s premier energy infrastructure company.”

The non-utility natural gas storage assets included in the sale are the Mississippi Hub storage facility in Simpson County, Miss., with a working capacity of 22.3 billion cubic feet (Bcf) of natural gas, and the Bay Gas storage facility in Southwest Alabama, which comprises five underground caverns with a working capacity of 20.4 Bcf of natural gas.

The sale included Sempra Energy’s approximate 91-percent stake in Bay Gas. Immediately prior to the sale, Sempra Energy’s subsidiary acquired the approximate 9-percent interest from a minority owner and included it in the sale to ArcLight. ArcLight owns now 100 percent of Mississippi Hub and Bay Gas.

Sempra Energy’s financial advisor for this transaction is Wells Fargo Securities, LLC, and its legal advisor is Jones Day.

ArcLight is one of the leading private equity firms focused on energy infrastructure investments. Founded in 2001, the firm helped pioneer an asset-based private equity approach to investing in the dynamic energy sector. ArcLight has invested approximately $21 billion in over 100 transactions since inception. Based in Boston, the firm’s investment team employs a hands-on value creation strategy that utilizes its in-house technical, operational, and commercial specialists and works closely with the firm’s 1,000-person asset management affiliate.

Sempra Energy, a San Diego-based electric and natural gas infrastructure company with 2017 revenues of more than $11 billion, is the utility holding company with the largest U.S. customer base. The Sempra Energy companies’ approximately 20,000 employees serve more than 40 million consumers worldwide.