According to The Wall Street Journal, Seeking Alpha and Street Insider, DTE Energy has announced that it has agreed to acquire midstream natural gas assets from M3 Midstream and Vega Energy Partners for a combined total of approximately US$1.3 billion.
It hopes that the deal will increase DTE’s presence in the Appalachian basin while also supporting the company's strategy to continue to grow and earn competitive returns for shareholders.
The agreement would see DTE purchase all of Appalachia Gathering System, located in Pennsylvania and West Virginia, and 40% of Stonewall Gas Gathering (SGG) in West Virginia, from M3. It would also acquire a 15% stake in SGG from Vega Energy Partners.
These assets allow access to multiple markets. They will become part of DTE's non-utility gas storage and pipeline business, which currently owns and manages a network of natural gas gathering, transmission and storage facilities.
DTE highlighted that the transactions will not materially change its current business mix.
“Demand for natural gas in the Great Lakes region is expected to increase significantly, driven by coal-to-gas conversions for electricity generation and economic growth,” DTE said.
The company added: “The low-cost natural gas supply from the Marcellus/Utica region is expected to serve this growth and displace higher cost alternatives.”
Edited from various sources by Anna NicklinSources: The Wall Street Journal, Seeking Alpha, Street Insider
Read the article online at: https://www.worldpipelines.com/business-news/27092016/dte-to-buy-midstream-assets/