Questar Pipelines is a Rocky Mountain energy hub that consists of 2,160 miles (3,476km) of FERC-regulated interstate natural gas pipelines providing transportation and underground storage services in Utah, Wyoming and Colorado
Questar Pipelines consists of 3,476km of interstate natural gas pipelines. (Credit: bstad from Pixabay)
Dominion Energy has signed an agreement with Southwest Gas Holdings to sell its Questar Pipelines in an all-cash transaction worth $1.54bn.
Under the terms of the agreement, Southwest Gas will also assume Questar Pipelines’ debt of $430m.
Questar Pipelines is a Rocky Mountain energy hub that consists of 2,160 miles (3,476km) of Federal Energy Regulatory Commission (FERC)-regulated interstate natural gas pipelines providing transportation and underground storage services in Utah, Wyoming and Colorado.
In July this year, Dominion Energy terminated the planned sale of Questar Pipelines to Berkshire Hathaway Energy, citing uncertainty associated with the receipt of clearance from the Federal Trade Commission.
At the same time, the company had also announced the launch of competitive process for the sale of Questar Pipelines.
Dominion Energy gas distribution president Donald Raikes said: “We are pleased to see this valuable business join forces with Southwest Gas Holdings, a company that shares our culture of safety, reliability and operational excellence and commitment to delivering essential services to customers.
“Together, these companies will continue to build upon an impressive legacy of delivering quality, essential service to customers in the Rocky Mountain Region, to the benefit of all stakeholders.”
The acquisition consists of Dominion Energy Questar Pipeline, its subsidiaries and certain associated affiliates, including Overthrust Pipeline, White River Hub and Questar Field Services.
Dominion Energy Questar Pipeline operates and owns 50% of the White River Hub offering transportation and hub services through interconnections with six interstate pipeline systems and a major processing plant near Meeker, Colorado.
The natural gas pipeline company owns and operates the Clay Basin storage facility located on the Wyoming-Utah border. Clay Basin is said to be the largest underground storage reservoir in the Rocky Mountain Region.
Dominion Energy intends to utilise the proceeds from the sale to reduce its debt and support its regulated capital plan.
The transaction is expected to be completed in the fourth quarter of 2021, subject to regulatory approvals.
Upon completion, Questar Pipelines will operate as a standalone subsidiary of Southwest Gas Holdings.
McGuireWoods acted as legal counsel to Dominion Energy in connection with the transaction, while Barclays served as its financial advisor.
Southwest Gas Holdings, through its subsidiaries, is engaged in purchasing, distributing and transporting natural gas.