Sempra and Arclight enters into an agreement for the sale of US natural gas storage projects

Sempra Energy has announced that its subsidiary has entered into an agreement to sell its non-utility U.S. natural gas storage facilities to an affiliate of ArcLight Capital Partners for US$332 million in cash, subject to adjustments for working capital. The facilities will become part of the Enstor natural gas storage platform, which ArcLight acquired in 2018.

The gas storage assets included in the sale to ArcLight are the Mississippi Hub storage facility in Simpson County, with a working capacity of 22.3 billion cubic feet (Bcf) of natural gas, and the Bay Gas storage facility in Southwest Alabama, which comprises five underground caverns with a working capacity of 20.4 Bcf of natural gas.

Sempra Energy's subsidiary currently owns approximately 91 percent of Bay Gas storage facility. Immediately prior to the sale, Sempra Energy's subsidiary will purchase the approximate 9-percent interest from a minority owner and include it in the sale to ArcLight.   

The sale of the non-utility natural gas assets to ArcLight is expected to be completed in the first quarter 2019, subject to customary closing conditions. At closing, ArcLight will own 100 percent of Mississippi Hub and Bay Gas storage facilities. 

Sempra Energy's financial advisor for this transaction is Wells Fargo Securities, LLC and its legal advisor is Jones Day.