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Sempra divests US$2.5 billion of US renewables and gas storage assets

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Hydrocarbon Engineering,

Sempra Energy has announced that it has completed the divestment of its US renewables business and non-utility natural gas storage assets, generating approximately US$2.5 billion in total cash proceeds. The announcement comes with today's completion of the sale of its remaining ownership interests in operating and development-stage wind assets to American Electric Power Company, Inc. (AEP) for US$584 million in cash, subject to customary post-closing adjustments.

"We have a long and successful track record of actively managing our portfolio, including exiting businesses that are no longer consistent with our strategy," said Joseph A. Householder, President and Chief Operating Officer of Sempra Energy. "The proceeds from the asset sales will be used to pay down debt and redeploy capital to support the strategic growth of Sempra Energy in North America."

The sale to AEP included approximately 724 MW of net operating capacity comprising the following projects: Black Oak Getty Wind in Minnesota and Apple Blossom Wind in Michigan, as well as Sempra Energy's interests in jointly-owned projects with BP Wind Energy: Auwahi Wind in Hawaii (wind and battery storage), Flat Ridge 2 Wind in Kansas, Mehoopany Wind in Pennsylvania, Cedar Creek 2 Wind in Colorado, and Fowler Ridge 2 Wind in Indiana. AEP also acquired all of Sempra Energy's wind projects currently in development.

In February, Sempra Energy completed the sale of its non-utility US natural gas storage facilities to an affiliate of ArcLight Capital Partners for US$328 million in cash, subject to post-closing adjustments. In December 2018, Sempra Energy completed the sale of its US solar assets and battery storage development projects, as well as its ownership interest in one wind facility, to Consolidated Edison for approximately US$1.6 billion. The company also is in the process of selling its equity interests in its South American businesses, including its 83.6% stake in Luz del Sur S.A.A. in Peru and 100% stake in Chilquinta Energía S.A. in Chile.

Credit Suisse and J.P. Morgan served as Sempra Energy's lead financial advisors and Latham & Watkins LLP its legal advisor on the sale of the wind portfolio.

AEP is one of the nation's largest investor-owned energy delivery companies, with approximately US$16 billion in annual revenues and US$69 billion in assets.

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