Sempra Energy said that its subsidiary has agreed to offload its non-utility natural gas storage facilities in the US to an affiliate of ArcLight Capital Partners for $332m in an all-cash deal.
The gas storage assets being sold by the Sempra Energy subsidiary are the Mississippi Hub and the Bay Gas storage facilities, located in Mississippi and Alabama, respectively.
Located in Simpson County, the Mississippi Hub storage facility has a working capacity of 22.3 billion cubic feet (Bcf) of natural gas. On the other hand, the Bay Gas storage facility, which is located in Southwest Alabama, is made up of five underground caverns, and has a working capacity of 20.4 Bcf of natural gas.
Currently, Sempra Energy’s subsidiary owns about 91% stake in the Bay Gas storage facility. Immediately before the sale, the subsidiary will buy the remaining 9% or so stake from a minority owner and include it in the transaction with ArcLight.
The transaction is anticipated to be closed in the first quarter of this year, based on meeting of customary closing conditions.
The divested natural gas storage facilities will be part of the Enstor natural gas storage platform following the completion of the deal. The Enstor gas storage platform was acquired last year by ArcLight through its subsidiary Amphora Gas Storage USA from Avangrid Renewables.
Sempra Energy president and chief operating officer Joseph Householder said: “Our agreement to sell our non-utility U.S. natural gas storage assets is an important component to achieving our portfolio-optimization goals we announced in June 2018.
“Completing this sale, along with the recently announced sale of our non-utility U.S. solar assets, enables us to reallocate capital to further strengthen our balance sheet and support Sempra Energy’s future growth opportunities.”
Last month, the California-based energy services holding company said that its subsidiary Port Arthur LNG signed an agreement with Polish Oil & Gas Company (PGNiG) to supply liquefied natural gas (LNG) from the Port Arthur LNG liquefaction-export facility in Texas to the latter for a period of 20 years.