KKR acquires 42% non-controlling interest in Sempra’s PALNG Phase 1

Business Developments & Projects

Sempra Infrastructure, a subsidiary of U.S. major Sempra, has completed the sale of a 42% indirect, non-controlling interest in its Port Arthur LNG (PALNG) Phase 1 project to investment management company KKR.

Courtesy of Sempra Infrastructure

The transaction results in Sempra Infrastructure retaining a controlling 28% indirect interest in Phase 1 at the project level and energy major ConocoPhillips owning the remaining 30% interest.

Justin Bird, CEO of Sempra Infrastructure, said: “We remain committed to developing energy infrastructure projects with strong partners to continue growing our portfolio while advancing global decarbonization and energy security.”

James Cunningham, Partner at KKR, noted: “We are pleased to close our investment in this critical energy infrastructure project led by the Sempra Infrastructure team. Port Arthur LNG Phase 1 has continued its strong momentum and is on track to meet its objectives of helping to deliver energy security, economic growth and a near-term supply of reliable and cleaner energy.”

To remind, Sempra Infrastructure reached a positive final investment decision (FID) for Port Arthur LNG Phase 1 in March 2023 and contracted global engineering, procurement and construction firm Bechtel Energy to build the project.

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Over 2.8 million hours of work have been completed since construction began this spring, with no lost-time incidents, Sempra claimed, adding that the expected commercial operation dates for Train 1 and Train 2 are 2027 and 2028, respectively.

The Port Arthur LNG Phase 1 is fully permitted and is designed to include two natural gas liquefaction trains, two LNG storage tanks and associated facilities with a nameplate capacity of approximately 13 million tons per annum (mtpa).

The long-term contractable capacity of approximately 10.5 mtpa is fully subscribed under binding long-term agreements with ConocoPhillips, RWE Supply and Trading, PKN ORLEN, INEOS and ENGIE, all of which became effective upon reaching FID.

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