Crestwood and Consolidated Edison, through their subsidiaries, have reached a purchase and sale agreement to sell Stagecoach Gas Services to Kinder Morgan for $1.225bn.

The agreement is subject to two closing periods, with the first closing includes the transfer of the Stagecoach subsidiaries, except Twin Tier Pipeline.

Stagecoach subsidiaries are valued at $1.195bn, and the first closing is expected to occur during the third quarter of 2021.

Crestwood and Con Edison have agreed to split the cash proceeds from the sale on a pro rata basis, according to their 50% ownership in the joint venture.

Con Edison CEO Timothy Cawley said: “Con Edison wants to express its appreciation to Crestwood for being a valuable partner and is gratified an operator the caliber of Kinder Morgan will be the steward of the Stagecoach assets.

“Through the implementation of our Clean Energy Commitment, Con Edison is leading the transition to the clean energy future that our customers expect and deserve. This transaction is consistent with our strategy to deliver on that future.”

Located in New York and Pennsylvania, Stagecoach consists of three natural gas pipeline and four storage facilities, that connect the natural gas supply sources and Northeast US demand markets.

The natural gas storage facilities include Stagecoach, Thomas Corners, Steuben and Seneca Lake, with a combined storage capacity of around 41Bcf.

The three natural gas pipelines include MARC I, North/South and the Twin Tier Pipeline, with a combined throughput capacity of nearly 3Bcf per day.

For the transaction, TD Securities served as financial advisor and Latham & Watkins as legal advisor for Crestwood and Con Edison.

Crestwood intends to use proceeds from the acquisition to repay its outstanding borrowings under revolving credit facility.