CPPIB is investing in Sempra Infrastructure Partners one month after selling its stake in Transportadora de Gas del Peru S.A.Chris Young/The Canadian Press
The investment arm of Canada Pension Plan is writing a multi-billion-dollar cheque to buy a minority stake in Sempra Infrastructure Partners alongside private equity giant KKR, showing its commitment to natural gas assets for years to come.
Based in San Diego, Sempra is spinning out the infrastructure arm by selling a 45-per-cent-stake to KKR and Canada Pension Plan Investment Board for a total of US$10-billion. The division develops, owns and operates natural gas pipelines, power generation assets and liquefied natural gas export facilities in the United States and Mexico.
After the sale, KKR, which is already a minority investor in the business, will become the majority owner and CPPIB will own a 13-per-cent stake in the entire business worth US$3-billion.
The deal illustrates CPPIB’s belief in natural gas as a fuel for the future.
“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,” Max Biagosch, CPPIB’s global head of real assets said in a statement.
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CPPIB is investing the money one month after selling its 49.87-per-cent equity stake in Transportadora de Gas del Peru S.A., a natural gas business in South America. CPPIB invested in TGP in 2013 and added more money in 2014 and 2017, eventually investing a total of US$1.4-billion.
TGP operates the main natural gas and natural gas liquids pipelines in Peru, which supply roughly 40 per cent of the country’s power generation.
For Sempra, the infrastructure sale is part of a corporate re-organization designed to simplify its business model, after the company’s shares have struggled.