Update On The Sempra Energy -- KKR Deal -- April 6, 2021

A reader who follows this a lot more closely than I do provided this "head's up" regarding Sempra Energy (SRE):

I want to pass on to you an analyst's take on the recent KKR-Sempra deal involving the $3 +  bilion that KKR is giving to Sempra for partial ownership of Sempra's LNG infrastructure.

Sempra is poised to announce - supposedly by the end of June  - an expansion of its Cameron facility from 12 to 25 million tonnes per year. (That is a lot). 

The funds to help in the buildout will partially come from KKR.

Any of the brownfield/expansion projects from existing US LNG plants are apt to be exceptionally profitable as so much of the existing infrastructure is already in place. This includes shipping berths, feed pipelines, onsite power plants, storage tanks, etc.

From a more macro view, the production costs of natgas  from US shale plays - whether associated like in the Bakken, Permian, at al, or dry gas plays like the Marcellus and Haynesville - have become so low as to continue to crowd out potential global competitors.

(Argentina, despite having amongst the largest shale gas resources on the planet, is embarking upon its second round of bidding to IMPORT more LNG this winter ... much of which will come from the US).

Previosuly posted: 

Sempra Energy, link here:

• offloads non-controlling interest in Sempra Infrastructure Partners to KKR
• summary:

• Sempra Energy entered into a definitive agreement to sell a non-controlling, 20% interest in Sempra Energy's new business platform, Sempra Infrastructure Partners, to KKR for $3.37B in cash.
• This transaction, expected to close in mid-2021, values Sempra Infrastructure Partners at ~$25.2B, including expected asset-related debt at closing of $8.37B.
• "Over the next decade, we expect the energy markets in North America to continue to grow and become increasingly integrated. Combining our resources with KKR improves our ability to capture new investment opportunities in cleaner forms of energy and the critical infrastructure that stores and transports it," SRE chairman and CEO Jeffrey W. Martin commented.
• As per agreement terms, KKR will be acquiring its indirect interest in IEnova at $4.13/share; KKR will have certain minority rights with respect to Sempra Infrastructure Partners correlated with investment size.