KKR-backed Vista Pacifico LNG canceled amid opposition

KKR-backed Vista Pacifico LNG canceled amid regulatory hurdles and community opposition

Earlier this month, KKR-backed Sempra Infrastructure (SI) canceled the Vista Pacifico liquefied natural gas (LNG) project, a proposed natural gas liquefaction terminal that would have been built near the port of Topolobampo, Mexico, in Baja California, a UNESCO World Heritage Site known as the “Aquarium of the World.” The project has been in development for four years and was formally opposed by more than twenty environmental organizations alongside local fishing communities, tourism businesses, and academic institutions due to the social and ecological threats to the area. Ultimately, Sempra failed to obtain a key permit from Mexico’s National Energy Commission (CNE) required to construct Vista Pacifico LNG, which effectively killed the project. 

Alongside the social and ecological risks, regulatory struggles, and community opposition, the Natural Resources Defense Fund (NRDC) recently published an issue brief: High Risk, High Inconsistency: Why investors should reconsider Sempra’s LNG project in the Gulf of California. The brief highlights the multiple risks to investors should the project move forward to operation. The brief points to the following risks: 

• Market volatility 
• Stranded-asset exposure 
• Utility governance and ratepayer risk
• Methane regulation and market access risk 
• Biodiversity and disclosure considerations 

While these risks were raised as specific to Vista Pacifico LNG and other proposed gas infrastructure projects in the biodiversity-rich area, these risks are also tied to broader concerns with private equity firms completing projects and deals outside the U.S., and uncertain long term gas demand.

KKR has a history of investing in projects with repeated environmental violations and organized community resistance

KKR has a history of backing LNG and fossil fuel projects despite strong community opposition. A 2023 analysis by the Private Equity Climate Risks consortium detailed three KKR projects, Port Arthur LNG, Cameron LNG, and the Coastal GasLink Pipeline, which showcased a pattern of environmental violations, failure to obtain community consent, lack of accountable business practices, and significant cost overruns. 

KKR’s Sempra Infrastructure developed Port Arthur LNG and Cameron LNG. Cameron LNG is currently operating in Louisiana and an expansion of the project is under development. Cameron LNG has a history of environmental violations including  air and water pollution. A 2024 report by Sierra Club found Cameron LNG is on track for $3.5 billion in subsidies from the struggling Cameron Parish due to the Industrial Tax Exemption Program (ITEP) in the state. Port Aurthur LNG phase 1 is under construction in Port Arthur, Texas, with phase 2 under development. While the company claims the project will stimulate local economies, local community advocates, Port Arthur Community Action Network, claim the project will increase the air pollution on local residents, which are primarily communities of color.  

The Coastal GasLink pipeline has been operational since 2023 but faced financial woes and had to increase the cost estimate several times due to construction delays including protest from some First Nations and environmentalists. 

A 2024 analysis of KKR’s energy portfolio found that KKR had investments in nearly 200 fossil fuel assets, which emitted an estimated 93 million metric tons of greenhouse gases in 2023, an emissions number 3,085 times higher than what the firm disclosed in its 2023 sustainability report. Along with its problematic investments in LNG infrastructure, nearly half of KKR’s emissions originated from its upstream oil and gas drilling operations. As of 2023, KKR’s portfolio included drilling operations in at least 10 oil and gas fields in the U.S. and Canada, including in some highly populated areas in Los Angeles and Orange counties, as well as operations in New Mexico, found to have flared polluting and dangerous compounds. 

While KKR does have some investments in renewable energy companies and assets, as of January 2026, 58% of the firm’s energy portfolio consisted of fossil fuel companies. 

Explore KKR’s energy portfolio in The Private Equity Global Energy Tracker. 

KKR’s environmental and community impacts associated with its large fossil fuel portfolio tell a very different story than what the firm claims, while it continues to publicly champion sustainable investing. 

Financial risks laid on investors 

The divergence between KKR’s expressed commitment to sustainable investing and its continued investment in highly controversial fossil fuel projects introduces financial risks for KKR’s investors. As the world accelerates the transition towards clean and renewable sources of energy, investments in costly and highly opposed new fossil fuel projects with extended break-even horizons, like pipelines and LNG facilities, may face increased development delays and costs and struggle to remain profitable in the long term. 

Some institutional investors with recent commitments to KKR infrastructure funds that may have exposure to the projects highlighted above and to other assets in KKR’s fossil fuel portfolio are Alaska Permanent Fund, Employees’ Retirement System of the State of Hawaii, Greater Manchester Pension Fund, Minnesota State Board of Investment, Santa Barbara County Employees Retirement System, and several New York pension funds, including New York City Board of Education Retirement System, New York City Employees’ Retirement System, Teachers’ Retirement System of the City of New York, and New York State Common Retirement Fund.