CorEnergy Infrastructure Trust, known as CorEnergy, has recently entered into a definitive agreement with Spire to sell its MoGas and Omega pipeline systems, collectively referred to as the MoGas System.

The transaction is valued at around $175m in cash, which is subject to final working capital adjustments.

The MoGas System is a crucial interstate natural gas transmission and distribution network, catering to markets in Missouri and Illinois.

The transaction, projected to conclude in the third quarter of this year, is contingent upon obtaining anti-trust clearance and fulfilling customary closing conditions.

Upon completion, the transaction is expected to generate an estimated $165m in net proceeds after accounting for taxes and transaction-related costs.

These net proceeds will be utilised to fully repay CorEnergy’s bank debt, which amounts to approximately $100m.

CorEnergy chairman and CEO Dave Schulte said: “The sale of our MoGas and Omega systems enables us to significantly de-leverage our balance sheet and strengthen our overall capital structure. This is one of several 2023 initiatives we are undertaking to improve our balance sheet and operating results, including proposed tariff increases and corporate cost reductions.”

Schulte added: “The team at MoGas and Omega has produced reliably profitable results and an excellent safety record as a part of CorEnergy, and we wish to thank them for their dedicated service over the past several years.

“Spire shares our commitment to providing safe, reliable, and environmentally sustainable service to the customers and communities that we serve, and we are pleased they will retain our field operating personnel.”

After the transaction is finalised, the US-based company intends to offer an updated outlook for 2023, which will encompass various opportunities within its California energy transition and other business initiatives.

During the transaction, CorEnergy received financial advisory services from Evercore, while legal counsel was provided by K&L Gates.