Image credits: PiMo Kang
News Article

Sempra to Buy IEnova in Full

By Paloma Duran | Fri, 12/04/2020 - 11:04

Sempra Energy is planning to buy the remaining 29.9 percent stake of IEnova in a deal worth US$6.13 billion. The deal came through after the Mexican government presented its second package of 29 infrastructure investments, totaling US$11.36 million.  

One of the main projects announced is the gas terminal being built by IEnova, Sempra Energy’s Mexican subsidiary. The MX$47 billion (US$2.28 billion) project is expected to liquify excess gas contracted by CFE and transport it to Asia. Currently, the facility Energía Costa Azul is waiting on the export permit to transport the liquefied natural gas (LNG). However, investment is already taking place, reported MBN.

The US$2 billion LNG export plan is one of the biggest privately funded energy projects in Mexico. In a company press release, IEnova said the project will generate 3,000 direct jobs and more than 10,000 indirect jobs during its construction. The project will support Mexico´s  energy security and boost the country´s economic development and competitiveness.

Tania Ortiz, Director General of IEnova, mentioned that this is one of the largest private investments in Baja California and it is expected to benefit the local community through social investment programs. It also aims to position Mexico as a key natural gas world player.

In an interview with MBN, Ortiz said Mexico has the unique opportunity to take advantage of North America’s low gas prices and its proximity to the US would allow the company to turn this into an opportunity, reported MBN.

IEnova must make sure Mexico has the appropriate infrastructure to import gas and deliver it from the US, however. “Providing an adequate energy supply is crucial to the country’s growth and hence, the creation of jobs for its citizens,” said Ortiz to MBN.

This year, oil and gas companies have paused their plans on the new LNG terminals due to the effects the COVID-19 pandemic has had on energy demand and prices. This blocked the rise of LNG investments, through which Asians countries aimed to meet new energy demands and diversify fuel sources, reported Gas Processing & LNG.

Sempra Energy expects to complete the deal by the end of 1Q21 which needs the authorization of the US Securities and Exchanges Commission (SEC), the National Banking and Stock Commission (CNBV) and the Mexican Stock Exchange (BMV), reported NS Energy.

Sempra said the company will combine IEnova with its North American LNG infrastructure unit. The new unit, Sempra Infrastructure Partners, will focus on the generation of renewable energy and the development and construction of the North American LNG and natural gas export infrastructure, reported Forbes.

In addition, Sempra will sell a non-controlling interest in the new unit to fund its growth. Mexican shares have been going up after Sempra launched the proposal. IEnova won 10.98 percent in the BMV with a price of MX$79.02 (US$4), reported Forbes.

Ortiz said IEnova has a long-term commitment to Mexico, which is reflected in the 24 years the company has worked with the government to strengthen energy infrastructure and contribute to the well-being of all Mexican citizens.



The data used in this article was sourced from:  
MBN, Reuters, IEnova, Gas Processing & LNG, NS Energy
Photo by:   PiMo Kang
Paloma Duran Paloma Duran Journalist and Industry Analyst