Sempra Energy, based in San Diego, California, intends to sell its entire portfolio of U.S. wind and solar assets, as well as certain U.S. midstream assets. The board of directors approved the asset sales on June 25.
According to Reuters, activist investors Elliott Management and Bluescape Resources Co, who have a combined stake of 4.9 percent in Sempra, pushed for a board shakeup and strategic review at the company earlier this month.
"Our strategy is to continue building a leading energy company operating best-in-class utilities and developing contracted energy infrastructure in some of the largest economies in the Americas, with a focus centered on North America," said Jeffrey W. Martin, CEO of Sempra Energy.
"This is just the first phase of our portfolio optimization, which we expect to continue in the coming months. We intend to continue evaluating our portfolio, looking for additional opportunities to create long-term value for all shareholders. We will pursue additional initiatives using a disciplined, phased approach, taking into consideration timing and market conditions," Martin added.
Midstream assets included in the planned sales are Mississippi Hub, LLC, an underground salt dome with 22 billion cubic feet (Bcf) of working natural gas storage capacity located near Jackson, Mississippi, along with related compression and pipeline facilities, and the company's 90.9-percent ownership interest in Bay Gas Storage Company, Ltd., a 20 Bcf natural gas storage facility near Mobile, Alabama. Both storage facilities are part of Sempra LNG & Midstream.
Also part of the planned sales are all of Sempra Renewables' solar and wind assets and investments, including wholly owned facilities, and joint-venture and tax-equity investments with a total generating capacity of approximately 2,600 MW, as well as projects in development.
Sempra Renewables has ownership interests and investments in nine solar projects in Nevada, Arizona and California and wind projects in eight states stretching from Hawaii to Pennsylvania.
"We will continue to be a leader in sourcing renewable energy for our utility customers, which is critical to the future of an expanding clean energy grid,” concluded Martin.