Sempra Energy’s subsidiary in Mexico, known as IEnova, has taken another step toward expanding its profile in the country’s energy landscape.
On Wednesday, Mexico’s antitrust commission approved IEnova’s purchase of a 50 percent stake in the infrastructure company Gasoductos de Chihuahua for about $1.1 billion from Pemex, Mexico’s state-run oil company.
The assets in the deal include three natural gas pipelines, an ethane pipeline, a liquid petroleum gas pipeline and an associated storage terminal.
IEnova officials declined to comment to the Union-Tribune on the deal, which is still subject to closing conditions, although the purchase is expected to be completed later this month.
But energy analysts see the acquisition as part of a larger plan for the San Diego-based Fortune 500 company.
«Their Mexican strategy is absolutely a key underpinning to the consolidated Sempra growth strategy.» said Julien Dumoulin-Smith, independent power producer equity analyst at UBS Investment Research.
IENova has been very active in Mexico in recent months.
In June, IEnova partnered with TransCanada to construct and operate a $2.1 billion underwater natural gas pipeline that will go from South Texas to Tuxpan, Mexico.
Earlier this month, IEnova jumped into the growing renewable energy market in Mexico, agreeing to buy 100 percent of the Ventika wind farm in northeastern Mexico for $852 million.
The Mexican government has set a clean energy mandate that begins in 2018 and calls for 35 percent of its power generation from renewable sources by 2024.
«The ability to wholesale transition the economy there from an oil-oriented economy towards natural gas, to take advantage of cheap renewables, that is no small thing and represents real savings for consumers and ultimately a real opportunity for substantial investment in infrastructure,» Dumoulin-Smith said.
According to a July company presentation, Sempra plans on spending more than $2.4 billion in Latin America through 2020.
«There are a lot of opportunities down there and if you can get in there early, you can position yourself well for future opportunities,» said Andy Smith, senior utilities analyst at Edward Jones.
Mexico’s energy industry is going through dramatic changes in the wake of 2013 reforms that saw Pemex lose its monopoly status.
The falling price of oil has forced Pemex to sell off some of its assets, which has attracted financial outfits with deep pockets, such as asset manager BlackRock and the private equity arm of Goldman Sachs, to look for investment opportunities.
IEnova, the first energy infrastructure company listed on the Mexican Stock Exchange, is one of the largest private energy firms in Mexico. At the end of last year, the company listed more than $4 billion in operating assets and projects under construction in Mexico.
«Next to their LNG (liquefied natural gas) expansion efforts, this is their second-most strategic pivot for the company,» Dumoulin-Smith said.
Sempra has made a massive investment in LNG — the process in which natural gas is super-cooled and condensed into liquid so it can be transported over long distances.
IEnova already operates a complex called Energía Costa Azul, just outside of Ensenada, that has been used to import liquefied natural gas. Sempra officials are considering adding an export component to Costa Azul that could go online by 2022 or 2023.
«There’s a lot of need in Mexico for energy infrastructure, whether it’s natural gas pipelines or electricity and other things,» said Smith. «So Sempra being down there and having interests in Mexico already, I think it’s a great opportunity for them to take advantage of that need.»
