Calgary-based AltaGas is selling its interest in the Central Penn Pipeline for $870 million, the company announced on Monday.
In a news release, AltaGas said it has entered into an agreement for the sale of its indirect, non-operating interest in the pipeline held by its subsidiary WGL Midstream Inc., to Meade Pipeline Investment, LLC, a subsidiary of NextEra Energy Partners, LP.
The transaction is expected to close in the fourth quarter of 2019 and is subject to customary closing conditions and regulatory approvals.
“We have exceeded our asset sales guidance range for this year, and we are well positioned to focus on executing against our unique value proposition,” said Randy Crawford, president and chief executive officer of AltaGas, in a statement.
“In 2019, we have increased our financial flexibility and de-levered our balance sheet. Operationally, our volumes at RIPET are at targeted levels, and we are focused on achieving more timely recovery of investments at our utilities. As we enter 2020 in a stronger position, we remain firmly focused on the future and unlocking the significant organic growth potential of our midstream and utilities assets.”
AltaGas has announced or completed about $2.2 billion in asset sales. That exceeds the top end of the previously announced $1.5 billion to $2.0 billion asset sales program targeted for 2019. It included the sale of its portfolio of U.S. distributed generation assets for $940 million (US$720 million), a deal that closed in September, and the sale of its interest in the Stonewall Gas Gathering System in May for $379 million (US$280 million).
“Central Penn is a FERC-regulated, 185-mile pipeline that originates in Susquehanna County, Pa., and extends to Lancaster County, Pa. It is an integral part of the larger Atlantic Sunrise project operated by The Williams Companies through Transcontinental Gas Pipe Line Co., LLC (Transco). The pipeline went into service in October 2018 and has the capacity to deliver up to approximately 1.7 Bcf/d of natural gas from the northeastern Marcellus producing area to markets in the mid-Atlantic and southeastern regions of the United States,” said AltaGas.
“In February 2014, WGL Midstream and certain partners formed Meade Pipeline Co LLC (Meade). Meade (39 per cent) and Transco (61 per cent) have joint ownership of Central Penn. WGL Midstream holds a 55 per cent interest in Meade (21 per cent indirect interest in Central Penn).”
Mario Toneguzzi is a Troy Media business reporter based in Calgary.