Sempra Energy to Pursue Formation of Sempra Partners, LP

Jun 16, 2015

SAN DIEGO, June 16, 2015 /PRNewswire/ -- Sempra Energy (NYSE: SRE) today 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.

"Sempra Partners is designed to support continued growth within Sempra Energy's existing strategy of long-term, contracted infrastructure development," said Debra L. Reed, chairman and CEO of Sempra Energy.  "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.

Due to limitations imposed by U.S. securities laws, Sempra Energy will not hold a conference call to discuss the content of this news release.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers, solicitations or offers to buy, or any sales of securities, will be made in accordance with the registration requirements of the Securities Act of 1933, as amended (Securities Act). This announcement is being issued in accordance with Rule 135 under the Securities Act.

Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company.  The Sempra Energy companies' 17,000 employees serve more than 32 million consumers worldwide.

This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements can be identified by words like "believes," "expects," "anticipates," "plans," "estimates,"  "projects," "forecasts," "contemplates," "intends," "depends," "should," "could," "would," "will," "confident," "may," "potential," "possible," "proposed," "target," "pursue," "goals," "outlook," "maintain," "designed" or similar expressions, or discussions of guidance, strategies, plans, goals, opportunities, projections, initiatives, objectives or intentions.  Forward-looking statements are not guarantees of performance.  They involve risks, uncertainties and assumptions.  Future results may differ materially from those expressed in the forward-looking statements.  Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others, that the MLP will not be formed, will not complete an offering of securities, will not raise the planned amount of capital even if an offering of securities is completed, will not contain the assets or have the structure currently proposed, will not complete the proposed actions on the timetable indicated and will not provide the expected benefits to Sempra Energy; local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions and the timing of actions, including actions by regulatory, governmental and environmental bodies in the United States and other countries in which we operate; actions by third parties, including lenders and joint venture partners; the timing and success of business development efforts and construction, maintenance and capital projects, including risks in obtaining, maintaining or extending permits, licenses, certificates and other authorizations on a timely basis and risks in obtaining adequate and competitive financing for such projects; energy markets conditions, including the timing and extent of changes and volatility in commodity prices, and the impact of any protracted reduction in oil prices from historical averages; the impact on the value of our natural gas storage assets from low natural gas prices, low volatility of natural gas prices and the inability to procure favorable long-term contracts for natural gas storage services; capital markets conditions, including the availability of credit and the liquidity of our investments; inflation, interest and currency exchange rates; the impact of benchmark interest rates; the availability of electric power, natural gas and liquefied natural gas, and natural gas pipeline and storage capacity; cybersecurity threats to the energy grid, natural gas storage and pipeline infrastructure, the information and systems used to operate our businesses and the confidentiality of our proprietary information and the personal information of our customers, terrorist attacks that threaten system operations and critical infrastructure, and wars; the ability to win competitively bid infrastructure projects against a number of strong competitors willing to aggressively bid for these projects; weather conditions, conservation efforts, natural disasters, catastrophic accidents, and other events that may disrupt our operations, damage our facilities and systems, and subject us to third-party liability for property damage or personal injuries; risks that our partners or counterparties will be unable or unwilling to fulfill their contractual commitments; risks posed by decisions and actions of third parties who control the operations of investments in which we do not have a controlling interest; risks inherent with nuclear power facilities and radioactive materials storage, including the catastrophic release of such materials, the disallowance of the recovery of the investment in, or operating costs of, the nuclear facility due to an extended outage and facility closure, and increased regulatory oversight; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements due to insufficient market interest, unattractive pricing or other factors; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond our control.  These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on the company's website at www.sempra.com.

Investors should not rely unduly on any forward-looking statements.  These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise.

Sempra International, LLC, Sempra U.S. Gas & Power, LLC, and Sempra Partners, LP, are not the same companies as the California utilities, San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas), and Sempra International, LLC, Sempra U.S. Gas & Power, LLC, and Sempra Partners, LP, are not regulated by the California Public Utilities Commission. Sempra International's underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power's underlying entities include Sempra Renewables and Sempra Natural Gas.

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SOURCE Sempra Energy

For further information: Media Contact: Doug Kline, Sempra Energy, (888) 340-8875, www.sempra.com; Financial Contact: Kendall Helm, Sempra Energy, (877) 736-7727, Investor@sempra.com