Electricity and natural gas distribution company Consolidated Edison (Con Edison) has signed an agreement to acquire 50% stake in Crestwood Equity Partners’ natural gas pipeline and storage assets located in northern Pennsylvania and southern New York for $975m in debt and equity.
Crestwood and Con Edison also formed a 50-50 joint venture Stagecoach Gas Services to own the natural gas pipelines and storage facilities, which will help in meeting the natural gas demands in Northeast US markets.
Con Edison said that the new entity will have an implied market value of about $2bn.
Con Edison Transmission president Joseph Oates said: "Our investment in these facilities supports our strategy for Con Edison Transmission to invest in energy infrastructure projects that will reliably deliver low cost energy supplies to customers, while earning competitive returns for our investors."
Crestwood will manage Stagecoach Gas Services, which will own four natural gas storage facilities including Stagecoach, Thomas Corners, Steuben and Seneca Lake with a combined storage capacity of approximately 41 Bcf.
The partnership will also own three natural gas pipelines- MARC I, North/South and the East Pipeline- having a combined throughput capacity of 2,960 Mmcf per day.
Crestwood general partner chairman, president and CEO Robert Phillips said: "Con Edison brings years of market experience, as a leading Northeast natural gas distributer, as well as financial resources and growth perspective to compete for new regional infrastructure projects and provide enhanced market services to customers."
The transaction is expected to get completed in the second quarter of 2016.
In January 2016, Con Edison announced acquisition of 12.5% stake in Mountain Valley Pipeline (MVP).