Pipeline operator Kinder Morgan Inc. has agreed to acquire Stagecoach Gas Services LLC, a natural gas pipeline and storage joint venture between Consolidated Edison Inc. and Crestwood Equity Partners LP, the company said on June 1.
Stagecoach consists of four natural gas storage facilities with a total FERC-certificated working gas capacity of 41 billion cubic feet and 185 miles of natural gas pipelines with multiple interconnects to major interstate natural gas pipelines, including Tennessee Gas Pipeline (TGP), a KMI subsidiary. The transaction requires regulatory approval under Hart-Scott-Rodino, and it is expected to close in the third quarter of 2021.
“Acquiring Stagecoach will enhance our service to customers in this part of the country,” Kimberly S. Watson, KMI’s president of interstate natural gas pipelines, said. “These natural gas pipeline and storage facilities help connect natural gas supply sources and Northeast demand areas. Natural gas has long been responsible for providing heat and hot water to homes and businesses in the Northeast, and it now has an increasingly vital role as a reliable, low emissions partner backing up growing renewable power generation. We look forward to integrating these facilities into our suite of existing assets in the region.”
KMI expects the investment to be immediately accretive to its shareholders. The $1.225 billion purchase price represents approximately 10 times Stagecoach 2020 EBITDA that, with synergies, is expected to improve to a high single-digit EBITDA multiple.
Saudi Arabia’s reduction in crude supplies comes as OPEC and its allies, a group known as OPEC+, decided earlier this month to extend most of its supply cuts into April.
Saudi Aramco was expected to maintain or slightly cut its December official selling prices for Asian buyers, according to a Reuters survey.
Saudi Arabia slashed its official selling price (OSP) for April for all its crude grades to all destinations, after OPEC’s oil supply cut pact with Russia fell apart on March 6, sending oil into a tailspin.