US-based energy transmission and production company Dominion Energy has signed an agreement with Brookfield Super-Core Infrastructure Partners to sell a 25% stake in Cove Point for more than $2bn in cash.
The deal excludes working capital and has an implied enterprise value of $8.22bn.
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The development comes as part of Dominion Energy’s previously announced plans on the recapitalisation of Cove Point, which has a 136-mile pipeline that connects the facility with the interstate pipeline system.
Dominion Energy chairman, president and CEO Thomas Farrell said: “The agreement highlights the compelling intrinsic value of Cove Point and allows us to efficiently redeploy capital toward our robust regulated growth capital programmes.”
Dominion Energy Cove Point also owns a liquefied natural gas (LNG) import, export and storage facility on the western shore of the Chesapeake Bay in Lusby, Maryland.
These Cove Point assets provide liquefaction, transportation, storage, peaking gas supply and gasification services, serving customers in the US, Japan and India.
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By GlobalDataLast year, the company completed a $4.1bn expansion to enable natural gas exports.
The proceeds from the offering are expected to be used towards general corporate purposes and reducing annual common equity financing.
Upon completion of the transaction by the end of this year, Dominion will retain full operational control of the facility and associated services.
Dominion noted that existing customers and employees will not be affected by the recapitalisation agreement.
J.P. Morgan has been appointed as the financial adviser while McGuireWoods served as the legal counsel to Dominion Energy for the transaction.
Kirkland & Ellis served as the legal counsel to Brookfield.
