KKR, Blackstone make US$17 billion natural gas bet after AI boost
Private credit lenders have been increasingly focused on investment-grade companies and large public firms for financing opportunities as they look to diversify in the growing market
[NEW YORK] Investment giants KKR and Blackstone are leading a combined US$17 billion investment in the natural gas industry, marking a massive push of private funds into a sector helping to quench artificial intelligence (AI) firms’ relentless thirst for energy.
KKR and Canada Pension Plan Investment Board on Tuesday (Sep 23) agreed to pay US$10 billion for a 45 per cent equity stake in Sempra’s infrastructure arm, which builds liquefied natural gas (LNG) projects. Meanwhile, Blackstone said that it would lead a US$7 billion investment to take a 49.9 per cent equity stake in the second development phase of Sempra’s Port Arthur export terminal in Texas.
The Blackstone-led deal is one of the largest private credit investments on record, and marks the first time private lenders are financing such a large project in construction. Blackstone provided around 60 per cent of the financing and brought in other lenders for the rest, according to a source familiar with the matter.
The deals highlight the confidence among investors that US LNG exports will be a pillar of the global energy landscape in the decades ahead as nations in Asia and elsewhere use the fuel to power their growing economies. It comes as Big Tech companies clamour for energy to power data centres and the Trump administration pursues fossil fuel dominance.
KKR is buying the Sempra stake through its global infrastructure strategy, which invests across the Americas and Western Europe. KKR’s infrastructure business has about US$90 billion in assets under management.
The sale of the Sempra Infrastructure Partners interest to KKR will help strengthen Sempra’s credit profile and improve its business mix “with a goal of approximately 95 per cent earnings from regulated US utilities”, and it eliminates the need for previously announced equity issuances, it said in a statement on Tuesday. Sempra shares rose as much as 5.4 per cent.
The KKR deal is expected to close in the second or third quarter of 2026, subject to regulatory approvals. After closing, a KKR-led consortium will become the majority owner of Sempra Infrastructure Partners, holding a 65 per cent equity stake, while Sempra will retain a 25 per cent interest alongside Abu Dhabi Investment Authority’s existing 10 per cent stake.
Sempra is expected to receive 47 per cent of the cash at close, 41 per cent by year-end 2027 and the balance about seven years after closing, according to the statement.
Private credit lenders have been increasingly focused on investment-grade companies and large public firms for financing opportunities as they look to diversify in the growing market. BLOOMBERG
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