Sempra (NYSE: SRE) has unveiled a series of strategic transactions aimed at reshaping its portfolio and reinforcing its position as a leading U.S. utility growth company. The announcements include the $10 billion sale of a 45% equity stake in Sempra Infrastructure Partners, alongside a final investment decision for the next phase of its Port Arthur LNG project.

The transactions, revealed on Tuesday, form part of five value creation initiatives that Sempra says will simplify its business model, reduce risk, and boost long-term financial performance. “The transactions announced today further Sempra’s corporate strategy by advancing the company’s capital recycling program and transition to a leading U.S. utility growth business,” said Jeffrey W. Martin, chairman and CEO of Sempra.

Under the agreement, affiliates of investment firm KKR, alongside Canada Pension Plan Investment Board (CPP Investments), will acquire a 45% equity interest in Sempra Infrastructure Partners. The deal values the business at $22.2 billion in equity and $31.7 billion in enterprise value. Proceeds will be paid in stages — 47% at closing, 41% by the end of 2027, and the remainder about seven years after closing. The structure allows Sempra to reinvest steadily in its U.S. utility operations.

The transaction, expected to complete in the second or third quarter of 2026 pending approvals, will leave a KKR-led consortium with a 65% controlling interest. Sempra will retain 25%, while the Abu Dhabi Investment Authority (ADIA) continues to hold 10%. Minority rights for Sempra and ADIA have been agreed. “The transaction announced today underscores our commitment to extend our strategic partnership with KKR, with whom we have a shared vision of improving America’s position as a global leader in LNG exports,” Martin added. “It also directly supports our five value creation initiatives designed to simplify our business, efficiently fund strong utility growth in Texas and California and improve our financial strength.”

Raj Agrawal, Global Head of Real Assets at KKR, commented: “Over the past four years, we have developed a close relationship with the Sempra Infrastructure Partners team and a deep understanding of their business. We are excited to grow this strategic partnership and are pleased to welcome CPP Investments alongside us as we work to expand Sempra Infrastructure Partners’ assets to help meet growing global demand for energy.”

Sempra said the divestment will sharpen its focus on regulated U.S. utilities, strengthen its balance sheet, reduce exposure to non-utility assets, and eliminate the need for equity issuances in its 2025–2029 capital plan.

In a parallel development, Sempra Infrastructure Partners has committed to advancing Port Arthur LNG Phase 2. The expansion will add two liquefaction trains, a storage tank, and related facilities, delivering an additional 13 million tonnes per annum of LNG. Capital costs are estimated at $12 billion plus $2 billion for shared infrastructure, with operations slated for 2030 and 2031.

The project is fully financed through a $7 billion equity investment led by Blackstone Credit & Insurance, alongside KKR, Apollo-managed funds, and Private Credit at Goldman Sachs Alternatives. Sempra Infrastructure Partners retains majority ownership at 50.1%. Engineering and construction will be undertaken by Bechtel Energy Inc., which also delivered Phase 1. The continuity, Sempra said, is expected to improve efficiency and reduce execution risks.

Phase 2 has already secured long-term offtake agreements with ConocoPhillips, EQT, JERA Co. Inc. and Sempra Infrastructure Partners, with further contracts anticipated.

Sempra updated its full-year 2025 GAAP EPS guidance to $3.29–$3.69, reflecting expected tax impacts from the equity sale. Adjusted EPS guidance remains at $4.30–$4.70, with 2026 adjusted EPS reaffirmed at $4.80–$5.30. The company reiterated its target of achieving the higher end of a 7%–9% annual EPS growth rate between 2025 and 2029. The company will discuss these developments on a conference call with investors at 11 a.m. EST.