Sempra Energy subsidiary to sell gas storage facilities for $332m

A subsidiary of Sempra Energy has signed an agreement to divest its non-utility US natural gas storage assets to an affiliate of ArcLight Capital Partners for a total consideration of $332m.

Under the terms of the agreement, ArcLight will acquire the Mississippi Hub storage facility with a working capacity of 22.3 billion cubic feet (Bcf) of natural gas.

The acquisition also includes the Bay Gas storage facility, in which Sempra Energy’s subsidiary currently owns a 91% interest. Located in south-west Alabama, the facility comprises five underground caverns with a total working capacity of 20.4Bcf of natural gas.

Before the closure of the transaction, the subsidiary will buy the remaining 9% interest from a minority owner and include it in the sale to ArcLight, giving it full ownership of the facility.

Once the transaction is completed, the facilities will become part of the Enstor natural gas storage platform, which was bought by ArcLight last May from Avangrid Renewables.

Sempra Energy president and chief operating officer Joseph Householder said: “Our agreement to sell our non-utility US natural gas storage assets is an important component to achieving our portfolio optimisation goals we announced in June 2018.

“Completing this sale, along with the recently announced sale of our non-utility US solar assets, enables us to reallocate capital to further strengthen our balance sheet and support Sempra Energy’s future growth opportunities.”

Subject to certain closing conditions, the transaction is expected to be completed in the first quarter of this year.

Wells Fargo Securities is serving as Sempra Energy’s financial adviser for the sale, while Jones Day is acting as the legal adviser.

Sempra Energy is developing the Port Arthur LNG liquefaction-export facility in Jefferson County, Texas, through its subsidiary Port Arthur LNG.