Kinder Morgan, Inc. and Brookfield Infrastructure Partners L.P. have jointly announced that they have agreed to sell a 25% minority interest in Natural Gas Pipeline Company of America LLC (NGPL) to a fund controlled by ArcLight Capital Partners, LLC (ArcLight) for US$830 million. The proceeds will be shared equally between KMI and Brookfield Infrastructure. The value of the minority interest implies an enterprise value of approximately US$5.2 billion for NGPL, which is approximately 11.2 times 2020 EBITDA. Upon closing, KMI and Brookfield Infrastructure will each hold a 37.5% interest in NGPL, and KMI will continue to operate the pipeline.
“Kinder Morgan and Brookfield Infrastructure are pleased to welcome ArcLight into the NGPL joint venture,” said Kinder Morgan Natural Gas Pipelines President Tom Martin. “We believe this investment shows the value of natural gas infrastructure both today and in the decades to come.”
For this transaction, NGPL is served by RBC Capital Markets as the exclusive financial adviser and King and Spalding as the legal advisor. Barclays served as the exclusive financial advisor to ArcLight and has provided a committed debt financing to ArcLight to support the transaction. Latham & Watkins LLP served as legal advisor to ArcLight. The transaction is expected to close in the first quarter of 2021.
NGPL is the largest transporter of natural gas into the high-demand Chicago-area market as well as one of the largest interstate pipeline systems in the US. It is also a major transporter of natural gas to large liquefied natural gas (LNG) export facilities and other markets located on the Texas and Louisiana Gulf Coast, US. NGPL has approximately 9100 miles of pipeline, more than 1 million compression horsepower and 288 billion ft3 of working natural gas storage. NGPL provides its customers access to all major natural gas supply basins directly and through its numerous interconnects with intrastate and interstate pipeline systems.
For more news and technical articles from the oil and gas pipeline industry, read the latest issue of World Pipelines magazine.
The February 2021 issue of World Pipelines includes: a report on Australasian pipelines; an interesting look at the need to protect pipeline information from the Freedom of Information Act (USA); analysis of Ukraine’s place in the global gas sector; and technical articles on subsea repair, coatings, ILI and SCADA systems.
Read the article online at: https://www.worldpipelines.com/business-news/23022021/kinder-morgan-and-brookfield-infrastructure-sell-ngpl-interest/
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