CPP Investments Acquires US$3 B Stake in Sempra Infrastructure Partners
The Canada Pension Plan Investment Board has signed a deal to buy a 13 per cent indirect equity interest in Sempra Infrastructure Partners from Sempra for about US$3 billion.
Sempra Infrastructure develops, owns, and operates natural gas pipelines, power generation and liquefied natural gas export facilities in the United States and Mexico.
The company also owns and operates more than 1,600 megawatts of renewable generation and a natural gas-fired power plant.
CPP Investments is making the investment alongside affiliates of private equity firm KKR and an existing investor in Sempra Infrastructure.
Max Biagosch, senior managing director, global head of real assets, at CPP Investments says natural gas has an important role to play in the global energy transition, and LNG infrastructure is central to meeting rising global demand and supporting long-term transition goals.
The deal transaction is expected close next year, subject to regulatory and other approvals and closing conditions.
Vallari Srivastava and Curtis Williams of Reuters also report Sempra sells $10 billion stake in unit, greenlights Port Arthur expansion project:
Sempra (SRE) said on Tuesday it would sell a 45% stake in its infrastructure unit for $10 billion, and has approved a $14 billion expansion of Port Arthur LNG project in Texas, sending the utility's shares to their highest in nearly seven months.
The stake sale to KKR (KKR) along with Canada Pension Plan Investment Board, implies an equity value of $22.2 billion for Sempra Infrastructure Partners, which houses liquefied natural gas assets and related pipeline and storage infrastructure.
A KKR-led consortium will hold 65% of the unit, while Sempra will retain 25% and Abu Dhabi Investment Authority will keep 10% after the deal closes, which is expected between the second and third quarters of 2026.
Private equity firms have been aggressively investing in power infrastructure, driven by surging electricity demand from AI data centers and rising domestic consumption.
For Sempra, the deal will help simplify its business model, reduce exposure to non-utility assets and eliminate the need to issue common stock to fund its $56 billion capital plan for 2025–2029.
The company said the transaction is expected to add about 20 cents to annual earnings per share from 2027.
Sempra shares rose more than 4% to $85.83. The company also announced that Sempra Infrastructure Partners has reached a final investment decision for the expansion of Port Arthur LNG Phase 2.
The project will add two liquefaction trains, an LNG storage tank and related facilities, and increase capacity by 13 million tonnes (MTPA) per year. Commercial operations are planned for 2030 and 2031.
The move underscores a rapidly growing demand for U.S. exports of the superchilled fuel.
Sempra has already sold 10 MTPA of the new capacity to ConocoPhillips (COP), JERA and EQT (EQTAB.ST) on long-term contracts. It also said in a Tuesday filing that a subsidiary will purchase up to 0.75 MTPA of what it described as excess capacity in an arrangement that could suggest trading plans.
Funding for the expansion comes from a $7 billion minority equity investment led by Blackstone Credit & Insurance, along with KKR, Apollo-managed funds and Goldman Sachs Alternatives. Sempra Infrastructure Partners said it would retain a 50.1% stake in the project.
IPE Real Assets also reports KKR, CPP Investments snap up $10bn stake in Sempra Infrastructure Partners:
KKR and Canada Pension Plan Investment Board (CPP Investments) have together purchased a 45% equity stake in Sempra Infrastructure Partners for $10bn (€8.5bn) in cash.
The latest investment by KKR follows an April 2021 deal in which the firm’s global infrastructure funds acquired a 20% stake in Sempra Energy for $3.37bn.
After the latest deal closes, a KKR-led consortium will become the majority owner of the North American utility, with a 65% stake, while Sempra will retain a 25% interest alongside Abu Dhabi Investment Authority’s existing 10% stake.
The deal, implying an equity value of $22.2bn for Sempra Infrastructure, is expected to close between the second and third quarters of 2026.
Jeffrey W. Martin, chairman and CEO of Sempra, said: “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.
“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, said: “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.”
Earlier today, CPP Investments issued a press release stating it is acquiring a stake in Sempra Infrastructure Partners:
Toronto, CANADA (September 23, 2025) – Canada Pension Plan Investment Board (CPP Investments) today announced it has entered into a definitive agreement to acquire an approximate 13% indirect equity interest in Sempra Infrastructure Partners (Sempra Infrastructure) from Sempra for approximately US$3.0 billion, alongside affiliates of KKR, a leading global investment firm and an existing investor in Sempra Infrastructure.
Sempra Infrastructure is a leading North American energy infrastructure company that develops, owns, and operates natural gas pipelines, power generation and liquefied natural gas (LNG) export facilities in the United States and Mexico. The company also owns and operates more than 1,600 MW of renewable generation and a natural gas-fired power plant.
“Natural gas has an important role to play in the global energy transition, and LNG infrastructure is central to meeting rising global demand and supporting long-term transition goals,” said Max Biagosch, Senior Managing Director, Global Head of Real Assets. “By strategically partnering with leading institutions such as KKR and Sempra, we are well-positioned to advance long-term value creation in a high-quality energy infrastructure platform. Sempra Infrastructure Partners plays an essential role in delivering reliable, affordable and increasingly sustainable energy solutions across North America and beyond. Through this investment, we are able to help meet that demand to deliver long-term value to the CPP Fund.”
The transaction is expected close in Q2 – Q3 in calendar 2026, subject to necessary regulatory and other approvals and closing conditions.
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Canada Pension Plan Fund in the best interest of the more than 22 million contributors and beneficiaries. In order to build diversified portfolios of assets, we make investments around the world in public equities, private equities, real estate, infrastructure, fixed income and alternative strategies including in partnership with funds. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At June 30, 2025, the Fund totalled C$731.7 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Instagram or on X @CPPInvestments.
Any time CPP Investments takes a US$3.0 billion stake (C$4.2 billion), it's a sizable stake, even if it's an indirect equity interest.
Given the players involved, Sempra Infrastructure has incredible backers, the who's who of private equity firms and top global funds like CPP Investments and Abu Dhabi Investment Authority.
To really appreciate this deal, take a step back and learn more about Sempra (SRE), a publicly traded utility based in San Diego, California:
Sempra operates as an energy infrastructure company in the United States and internationally. It operates through three segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. The Sempra California segment provides natural gas and electric services to Southern California and part of central California. As of December 31, 2024, it offered electric services to approximately 3.6 million population and natural gas services to approximately 3.3 million population that covers 4,100 square miles. This segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. As of December 31, 2024, it served a population of 21.1 million covering an area of 24,000 square miles. The Sempra Texas Utilities segment engages in the regulated electricity transmission and distribution business. As of December 31, 2024, its transmission system included 18,324 circuit miles of transmission lines; 1,288 transmission and distribution substations; interconnection to 192 third-party generation facilities totaling 58,597 MW; and distribution system included approximately 4 million points of delivery and consisted of 125,975 miles of overhead and underground lines. The Sempra Infrastructure segment develops, builds, operates, and invests in energy infrastructure to help enable the access to cleaner energy in markets in the United States, Mexico, and internationally. The company was formerly known as Sempra Energy and changed its name to Sempra in May 2023. Sempra was incorporated in 1996 and is based in San Diego, California.
Sempra (NYSE:SRE) announced a $10 billion deal to sell a 45% stake in Sempra Infrastructure Partners to affiliates of KKR & Co (NYSE:KKR) and Canada Pension Plan Investment Board.
The transaction is expected to close in the second or third quarter of 2026. The move is designed to strengthen the company’s balance sheet and increase its focus on regulated utilities in the U.S.
The agreement values Sempra Infrastructure Partners at $22.2 billion in equity and $31.7 billion in enterprise value. Once completed, KKR and its partners will hold 65% of the business, while Sempra will retain 25% alongside the Abu Dhabi Investment Authority’s 10% interest.
“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 Chairman and CEO Jeffrey W. Martin.
The deal supports funding for the company’s 2025–2029 capital plan without requiring new equity issuance.
Port Arthur LNG Expansion
Sempra Infrastructure Partners also reached a final investment decision to proceed with Phase 2 of the Port Arthur LNG project. The $14 billion expansion includes two liquefaction trains, an LNG storage tank, and shared facilities. Operations are targeted for 2030 and 2031 for Trains 3 and 4.
Financing And Partnerships
The project secured $7 billion in equity financing led by Blackstone Inc.’s (NYSE:BX) Blackstone Credit & Insurance, joined by KKR, Apollo-managed funds and Goldman Sachs Alternatives. These investors acquired a 49.9% minority interest, while Sempra Infrastructure Partners retained majority control. Details of Blackstone’s role in the funding are available here.
Bechtel Energy Inc. has been contracted to build the new phase, leveraging experience from Phase 1 to streamline construction and reduce risk. Phase 2 is already backed by long-term sales agreements with ConocoPhillips (NYSE:COP), EQT Corp. (NYSE:EQT), JERA Co. Inc., and Sempra Infrastructure Partners.
Outlook
Sempra updated its 2025 GAAP earnings guidance to $3.29–$3.69 per share from $4.90-$5.25 versus analyst estimates of $4.55, while affirming adjusted EPS guidance of $4.30–$4.70 versus the $4.53 estimate.
It also reaffirmed its 2026 adjusted EPS target of $4.80–$5.30 versus the $ $5.01 analyst estimate and projected annual earnings growth of 7% to 9% through 2029.
Price Action: At last check Tuesday, SRE shares were trading higher by 4.33% to $85.94.
Whenever you hear a CEO stating the transaction will help "advance the company’s capital recycling program," it just means they are going to pay down debt and focus on growing their utilities business.
So, they're carving out Sempra Infrastructure Partners but retaining a 25% stake.
KKR led the consortium and they will nurture this company in the years ahead, helping it grow as demand for energy soars.
And CPP Investments which has a strong strategic relationship with KKR got a nice slice of the action, a 13% stake in Sempra Infrastructure Partners.
This is a fantastic long-term strategic investment, that's why CPP Investments committed U$3 billion to acquire and hold an indirect equity interest.
Below, Sempra Chairman and CEO Jeffrey Martin joins 'Mad Money' host Jim Cramer to talk quarterly results, competition in the space, the state of the utilities sector and more (December, 2024).
Listen carefully to his comments including what he says about Sempra Infrastructure Partners and why their platforms across the energy chain set them up for strong future.
Also, Bloomberg reports Sempra (SRE) climbed after the company agreed to sell a 45% equity stake in its infrastructure arm to affiliates of KKR and Canada Pension Plan Investment Board for $10 billion. The sale will help strengthen Sempra’s credit profile and improve its business mix with a goal of approximately 95% earnings from regulated US utilities. The deal is expected to close in the second or third quarter of 2026, subject to regulatory approvals.
Lastly, TC Energy CEO and President Francois Poirier discusses his company's big bet on America's energy future on 'Mornings with Maria.' Listen carefully to his comments here and link them to the Sempra Infrastructure deal.
Update: On Wednesday morning, US Energy Secretary Chris Wright appeared on CNBC stating: "We need to add 100 gigawatts of new firm capacity in the next 5 years." That's a lot of energy, watch his interview below.
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