NextEra Energy Partners has agreed to acquire Central Penn Line pipeline project’s co-owner Meade Pipeline for around $1.37bn (£1.12bn).

The total consideration includes nearly $90m in capital contributions to be made in the future by NextEra Energy Partners through 2022 towards the expansion of the Central Penn Line.

Meade Pipeline holds a stake of 39.2% in the 298km long intrastate natural gas pipeline in Pennsylvania. The company is a joint venture (JV) between AltaGas’s subsidiary WGL Midstream, Cabot Oil & Gas, Energy Investors Fund (EIF), and Vega Energy.

NextEra Energy Partners CEO’s comments on Meade Pipeline

NextEra Energy Partners chairman and CEO Jim Robo said: “Meade Pipeline is a very attractive acquisition for NextEra Energy Partners, and is expected to yield a double-digit return to NextEra Energy Partners’ limited partner unitholders and generate a cash available for distribution yield of roughly 14%.

“This is NextEra Energy Partners’ second third-party acquisition, which helps extend the partnership’s best-in-class long-term growth visibility and further strengthen its investor value proposition.”

The Central Penn Line is part of the larger Atlantic Sunrise pipeline project, which is regulated by the Federal Energy Regulatory Commission (FERC). The Atlantic Sunrise pipeline project, which in turn is an expansion of the Transco pipeline system, delivers gas produced from the Marcellus region to the mid-Atlantic and Southeastern regions.

Atlantic Sunrise is operated by Williams through Transcontinental Gas Pipe Line (Transco), which owns the remaining stake of around 61% in the Central Penn Line.

Central Penn originates in Susquehanna County and extends to Lancaster County. Commissioned in October 2018, Central Penn Line has a transportation capacity of around 1.7Bcf/d.

Cabot Oil & Gas revealed that it will receive $256m (£208.53m) for the sale of its 20% stake in Meade Pipeline, while the Canada-based AltaGas will earn around $657m (£535.17m) from the sale of WGL Midstream’s 55% stake in the joint venture.

NextEra Energy Partners expects to complete the transaction within the next 60 days, subject to receipt of the necessary approvals and other customary conditions and approvals.