US based renewable energy developer NextEra Energy Partners has agreed to buy NET Midstream and its natural gas pipeline assets in a deal worth $2.1bn.
The transaction will add seven long-term contracted pipelines in Texas to the firm’s portfolio.
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This acquisition will help NextEra Energy Partners to increase its capacity to transport three billion ft³ of shale gas per day. It will also offer a potential to expand it further by one billion ft³ in the future.
NET Midstream’s sold assets consist of the 120 mile long NET Mexico Pipeline that delivers low-cost natural gas from Eagle Ford Shale to Mexico border, and the 158 mile long Eagle Ford Pipeline.
The deal also includes nearly 156 mile long Monument Pipeline, which transports gas from Katy Hub to city of Houston, Houston Ship Channel and Galveston County.
Four other smaller pipelines, serving variety of power plants and residential loads, are also part of the deal.
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By GlobalDataThe deal value will include an initial payment of $1.8bn and a future expansion investment of around $300m in 2016.
The firm intends to close the transaction within the next 75 days.
NextEra Energy Partners chairman and chief executive officer Jim Robo said: "The acquisition is expected to provide attractive yields to our investors and complements the partnership’s existing renewables portfolio by reducing the impact of resource variability on NextEra Energy Partners’ total portfolio.
"In addition, the transaction establishes NextEra Energy Partners’ presence in the long-term contracted natural gas pipeline space, providing a platform for future growth."
