Sempra Energy on Thursday said it has reached an agreement to sell some U.S. natural gas storage facilities to private equity investor ArcLight Capital Partners LLC for $332 million.
The sale, expected to close by the end of March, includes Sempra's Mississippi and Alabama facilities, which would become part of ArcLight's Enstor Gas LLC gas storage platform acquired last year.
The Mississippi Hub storage facilities in Simpson County, MS, include 22.3 Bcf of working capacity, and Bay Gas storage in southwest Alabama has five underground caverns with 20.4 Bcf of working capacity.
Sempra now owns 91% of the Bay Gas facilities, but it plans to acquire the other 9% before the transaction is completed to give ArcLight 100% ownership in each storage complex.
In the midstream, ArcLight currently has holdings in 25 different ventures, including Enstor via affiliate Amphora Gas Storage USA LLC. Enstor has a total storage capacity of 88.5 Bcf and a net working gas storage capacity of 67.5 Bcf. Last year, ArcLight also paid $1.12 billion for a package of Enbridge Inc.’s midstream assets.
Since its founding in 2001, ArcLight has invested $21 billion in more than 100 transactions involving energy infrastructure ranging from power plants in the early 2000s to a $1.25 billion restart of a refinery on St. Croix in the U.S. Virgin Islands.
ArcLight officials describe the investment firm's approach to energy infrastructure ownership as a "hands-on value creation strategy" applying in-house technical, operational and commercial specialists working closely with the firm's 1,000-person asset management affiliate.
Under pressure last year from two major shareholders, Sempra senior management announced plans to sell off its U.S. renewable energy and midstream assets to concentrate on its utility and liquefied natural gas holdings.
Sempra President Joseph Householder has said completing the sales would enable the company “to reallocate capital to further strengthen our balance sheet and support future growth opportunities."