Sempra Energy on Monday said its liquefied natural gas (LNG) unit has a memorandum of understanding with a Chinese operator to provide supply for the country’s power generation sector.
Sempra LNG’s tentative agreement with the parent company of China Yangtze Power International Hongkong Co. Ltd. (CYP) still needs to be finalized.
“This initial agreement...represents an opportunity to support strong growth in natural gas demand in Asia, with future expansions of our LNG projects right here in North America," said CEO Jeffrey Martin.
Sempra also said it sold its Peru power assets to CYP for $3.59 billion, and it plans to direct some of the proceeds to its U.S. utilities in California and Texas. The sale includes a 83.6% share of utility Luz del Sur SAA, as well as Tecsur SA and Inland Energy SAC.
The sale is expected to be completed in 1Q2020.
Sempra is looking to divest all of its South American assets and is actively looking for a buyer for its electric business in Chile, including a 100% stake in Chilquinta Energia SA and Tecnored SA. The company expects to announce an agreement by the end of the year, Martin said.
Luz del Sur serves Peru’s southern region including Lima, and is the largest electric company in the country. CYP is a subsidiary of China Yangtze Power Co. (CYPC), the largest publicly listed power company in China.
Bank of America Merrill Lynch and Lazard are serving as financial advisers to Sempra, while White & Case is serving as legal adviser.