Canada Pension Plan Investment Board Invests in Sempra Infrastructure

The Canada Pension Plan Investment Board is investing billions of dollars in Sempra Infrastructure, a natural gas infrastructure company based in San Diego, in partnership with private equity giant KKR. The investment will see CPPIB own a 13-per-cent stake in the business, worth US$3-billion, and support the company's expansion of its natural gas pipelines and liquefied natural gas export facilities in the United States and Mexico.

Key Takeaways:

• CPPIB and KKR are investing US$10-billion in Sempra Infrastructure, with CPPIB owning a 13-per-cent stake worth US$3-billion.
• The investment supports CPPIB's belief in natural gas as a fuel for the future, with Max Biagosch, CPPIB's global head of real assets, stating that natural gas has an important role to play in the global energy transition.
• The deal illustrates the institutional infrastructure owners' appetite for natural gas, with Wood Mackenzie reporting that natural gas is a compelling option for transitioning from coal to achieve net-zero emissions by 2050.
• Sempra Infrastructure is spinning out its infrastructure arm to focus on Texas and the expansion of its Port Arthur LNG facility.
• CPPIB will retain the proceeds from the sale of its 49.87-per-cent equity stake in Transportadora de Gas del Peru S.A. in South America.
• Sempra Infrastructure owns and operates natural gas pipelines, power generation assets, and liquefied natural gas export facilities in the United States and Mexico, with 8,200 kilometres of natural gas transportation and distribution pipelines.

Statistics:

• CPPIB will invest US$3-billion in Sempra Infrastructure.
• The deal will see KKR, CPPIB, and Abu Dhabi Investment Authority own 65%, 13%, and 10% stakes in Sempra Infrastructure, respectively.
• Sempra Infrastructure will retain a 25% stake in its infrastructure arm.
• CPPIB invested US$1.4-billion in Transportadora de Gas del Peru S.A. between 2013 and 2017.
• Sempra Infrastructure owns LNG projects on two coasts, including the Cameron LNG facility in Louisiana and the Energia Costa Azul facility in Mexico.

Sources:

• Wood Mackenzie - report on the appetite for natural gas
• Globe and Mail - article on the investment in Sempra Infrastructure by CPPIB and KKR.