Dominion Energy Agrees To Sell $1.9B Questar Pipeline To Southwest Gas

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Dominion Energy Agrees To Sell $1.9B Questar Pipeline To Southwest Gas

Thu, 10/07/2021 - 12:04
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A man in a business suit offers money (copyright by Shutterstock/Oleksandrum)
A man in a business suit offers money (copyright by Shutterstock/Oleksandrum)

The Richmond-based company Dominion Energy Inc. has agreed to sell $1.9B worth Questar Pipeline to a Las Vegas’s Southwest Gas Holdings Inc., Fortune 500 utility announced Tuesday, October 5, 2021. The all-cash agreement between the two companies includes the assumption of debt of up to $430 million.

Questar Pipeline is an interstate natural gas pipeline providing natural gas transmission and underground storage services to Wyoming, Utah, and Colorado. The company also operates and owns an extensive pipeline stretching over 1,867 miles. The pipeline transports gas to their delivery points in the West and Midwest, as well as Idaho.

“We are pleased with the result of our sale process for these high-quality assets,” Dominion Energy Inc. Chair, President and CEO Robert M. Blue said in a press statement. Blue also added that the successful sale process marked a great step towards the company’s evolution, allowing it to focus on meeting the energy needs of its customers.

The transaction would also help grow the company’s clean energy portfolio, including developing the largest offshore wind Firm in North America. In November 2020, the company sold its gas storage and transmission assets worth $2.7 billion in cash to Berkshire Hathaway Energy.

In July 2020, the company said the sale of assets as part of its efforts to streamline the company and reposition it strategically with a pure focus on state-regulated, sustainability-focused utility business. The Questar Pipeline sale deal was initially part of the deal with Berkshire Hathaway. However, the pipeline’s part of the deal was canceled in July due to the uncertainty associated with getting Federal Trade Commission clearance.

According to the company’s news, the proceeds from the sale of the pipeline infrastructure will be used to reduce the parent-level debt burden, including a loan Dominion signed for in July to help repay a $1.3 billion deposit made by Berkshire Hathaway Energy.

The sales proceeds will also be used to support Dominion’s decarburization plan as it faces a state mandate to produce clean energy for Virginia customers from zero-carbon sustainable energy sources by 2045. As part of their commitment to achieving their goals, Dominion is currently developing a 180-turbine offshore wind farm lying just 27 miles off the coast of Virginia Beach.

The upcoming new owner and operator of the Questar Pipeline, Southwest Gas Holdings Inc., is popular for offering gas services to over 2 million customers in Arizona, Nevada, and parts of California. Closing the transaction in the last quarter of the year will help enrich the South West Gas portfolio and boost its market output.

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