Big shot: Players and fans of the Duke Blue Devils football team celebrate on the field at Wallace Wade Stadium in Durham, North Carolina. The state is one of several that Enbridge powers, making it the largest gas utility business by volume in North America. — AFP
NEW YORK: Enbridge will buy three utilities from Dominion Energy for US$14bil, including debt, the Canadian pipeline operator says, creating North America’s largest natural gas provider and doubling its gas distribution business.
The deal is seen as a bet on the future of natural gas in a regulated market, even as energy companies and consumers are transitioning to a greener future by phasing out fossil fuels.
The deals for East Ohio Gas, Questar Gas and Public Service Co of North Carolina will consist of US$9.4bil in cash and US$4.6bil in assumed debt.
The divestments are the latest by Dominion following a strategic refresh announced last year aimed at focusing on its regulated operations. In July, Dominion agreed to sell its 50% stake in Cove Point LNG to the energy arm of Berkshire Hathaway for US$3.3bil.
Enbridge president and chief executive officer Greg Ebel described the assets the company is acquiring as “must-have” infrastructure for providing safe, reliable and affordable energy.
The deal is expected to close in 2024, subject to approval from the US Federal Trade Commission and the Committee on Foreign Investment, among others.
Upon closing, Enbridge would supply over nine billion cubic feet per day (bcfpd) of gas to about seven million customers in Ohio, North Carolina, Utah, Idaho and Wyoming, making it the largest gas utility business by volume in North America.
It would give the Calgary-based company access to a bigger chunk of cash from US consumers as they buy gas for cooking and heating from an Enbridge-owned utility.
“Enbridge is currently the only major pipeline and midstream company that owns a regulated gas utility and we’ve further strengthened that position today by doubling the size of our gas distribution and storage business,” Enbridge’s chief financial officer Patrick Murray said in a statement.
Ratings agency Moody’s swiftly downgraded the outlook for Enbridge and four subsidiaries to negative from stable and said that the deal would add pressure to an “already weak financial profile that we expect to persist following the transaction close”. — Reuters
