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Sempra to Create LNG-Focused MLP

Share Print Bookmark    |    Wednesday,June 17,2015

Sempra Energy announced that its board of directors has authorized the company to pursue the formation and initial public offering of a publicly traded partnership to be called Sempra Partners, LP, expected to be listed on the New York Stock Exchange under the ticker symbol "SREP."

Sempra Energy has received its Private Letter Ruling from the Internal Revenue Service related to the formation of its master limited partnership (MLP) and would expect to form Sempra Partners as an MLP.  Sempra Partners will own assets and interests producing MLP-qualifying income, including dividends from a corporate subsidiary.  Initially, the MLP is expected to own one or more of the following assets: an interest in a U.S. entity with contracts related to deliveries of liquefied natural gas (LNG) at the Energia Costa Azul regasification facility; interests in certain of Sempra Energy's contracted renewable energy projects; or other assets with attributes attractive for inclusion in Sempra Partners.

Sempra Energy expects to grant Sempra Partners a right of first offer (ROFO) on certain LNG-related infrastructure projects, including Sempra Energy's 50-percent interest in the first three trains of the Cameron natural gas liquefaction terminal and Sempra Energy's 100-percent interest in Cameron Interstate Pipeline, as well as Sempra Energy's interests in certain contracted wind and solar projects.

Debra L. Reed, chairman and CEO of Sempra Energy, said: "Sempra Partners is designed to support continued growth within Sempra Energy's existing strategy of long-term, contracted infrastructure development. We remain focused on value creation for the Sempra Energy shareholders and we believe Sempra Partners will provide an additional source of competitively priced capital to continue to support this initiative for the long term."

Sempra Energy expects Sempra Partners to file a registration statement with the Securities and Exchange Commission (SEC) in the second half of 2015. Subject to market conditions and further approval of Sempra Energy's board of directors, an offering of common units representing limited-partner interests would follow registration with the SEC.

Upon completion of the initial public offering, Sempra Energy expects to own the general partner of Sempra Partners, all of its incentive distribution rights, a portion of its common units and all of its subordinated units.