Berkshire Hathaway Energy has successfully executed an agreement to acquire Dominion Energy’s 50% limited partnership stake in the Cove Point LNG, LP business.
Pending regulatory approvals, the purchased interest will be held under the umbrella of BHE GT&S, LLC, a subsidiary of Berkshire Hathaway Energy. A subsidiary of BHE GT&S already serves as the general partner and operator of the Cove Point natural gas pipeline and its liquefied natural gas terminal, both situated in Lusby, Maryland.
With a transaction value of $3.3 billion, the deal will primarily be funded through the utilization of existing cash reserves, including proceeds from the liquidation of specific investments. Once the transaction is finalized, Berkshire Hathaway Energy will bolster its ownership by securing a 75% limited partnership stake in Cove Point LNG, LP. It is worth noting that the remaining 25% limited partnership interest in Cove Point LNG, LP will be retained by a subsidiary of Brookfield Infrastructure Partners.
Paul Ruppert, the president of BHE GT&S, expressed his pride in the operations conducted at Cove Point and shared his excitement regarding this new opportunity to enhance their ownership in these globally renowned facilities. He emphasized that the dedicated Cove Point team would continue to prioritize providing secure, affordable, and dependable service to their esteemed customers.
Located on the western shore of the Chesapeake Bay, the facility is the first such facility on the East Coast. It is recognized as one of the most technically advanced and environmentally sensitive LNG facilities in the world, and has a storage capacity of 14.6 billion cubic feet (BCF) and a daily send-out capacity of 1.8 BCF.
Cove Point produces LNG under 20-year contracts for ST Cove Point, a joint venture of Sumitomo Corporation and Tokyo Gas, and for Gail Global (USA) LNG, the U.S. affiliate of GAIL (India) LTD.
Since the facility first entered commercial service in April 2018 for natural gas liquefaction and export, LNG produced from the facility has supported the energy needs of 28 countries, including many in Europe in recent months. And Cove Point LNG loaded its 300th commercial cargo at the end of July.
With this strategic move, Berkshire Hathaway Energy continues to expand its portfolio of world-class assets. This acquisition not only aligns with the company’s long-term growth strategy but also reinforces its position as a prominent player in the ever-evolving energy sector.
© 2023 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.