LUSBY, Md. — Dominion Energy, one of the nation’s largest producers and transporters of energy across 20 states, recently came to terms with Berkshire Hathaway Energy on a sale that will include a 25% stake in the Cove Point Liquified Natural Gas(LNG) processing plant, among other assets.
The transaction, which still needs to be approved by the Federal Trade Commission and the U.S. Department of Energy, has been valued at approximately $9.7 billion, which will include a $4 billion payment to Dominion and the assumption of roughly $5.7 billion of their existing debt.
At the Cove Point LNG plant, one of only six in the country, Dominion Energy will continue to own 50% and Brookfield Asset Management will own the remaining 25%. Berkshire Hathaway Energy will run the plant when the deal is final, which is anticipated for some time in the fourth quarter of 2020.
Other assets from the transaction that will now enter into Berkshire Hathaway Energy’s $100 billion portfolios include ownership stake of Dominion Energy Transmission, Questar Pipeline which includes Overthrust and White River Hub, the Carolina Gas Transmission, a 50% interest in the Iroquois Gas Transmission System, legacy gathering and processing operations, and various “farmout acreages.”
“This transaction represents another significant step in our evolution as a company, allowing us to focus even more on fulfilling utility customer needs and positioning us for a bright and increasingly sustainable future,” Dominion President and C.E.O. Thomas Farrell II said in a statement on Monday. “This narrowing of focus will also allow us to increase our long-term earnings growth rate guidance by around 30 percent. Our rebased dividend policy better reflects our revised operating and financial strengths, aligns with our best-in-class industry peers, and allows us to grow our dividend much more rapidly than before.”
Dominion’s interests in The Atlantic Coast Pipeline, which was recently canceled after cost estimates from legal conflicts inflated the pipeline’s price by billions, were not included in the transaction.
In their statement, Dominion noted that they are planning to repurchase common shares with the estimated $3 billion after-tax proceeds that they receive, subject to market prices and “other factors.”
Berkshire Hathaway Inc. founder and chairman, Warren Buffet, said he was excited to be gaining such a “great” asset. The purchase should increase Berkshire Hathaway Energy’s interstate natural gas transmission in the United States from 8% to roughly 18%.
“I admire Tom Farrell for his exceptional leadership across the energy industry as well as within Dominion Energy,” Buffet said in a statement Monday. “We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business.”
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