Transactions - AUGUST 1, 2017

Blackstone Energy to pay $1.57b for stake in Rover Pipeline

by Richard Fleming

Energy Transfer Partners announced that its wholly owned subsidiaries, Energy Transfer Interstate Holdings and ET Rover Pipeline, have signed an agreement with funds managed by Blackstone Energy Partners and Blackstone Capital Partners whereby Blackstone will contribute approximately $1.57 billion in cash in exchange for a 49.9 percent interest in HoldCo.

Upon completion, the Rover Pipeline will be an approximately 700-mile pipeline designed to transport 3.25 billion cubic feet of natural gas per day from the Marcellus and Utica Shale production areas to markets across the United States as well as into Union Gas Dawn Hub in Ontario, Canada, for redistribution back into the United States or into the Canadian market.

The Blackstone investment will reimburse ETP for its pro rata share of the construction costs incurred by ETP through the closing date in connection with the Rover Pipeline, specified amounts of future construction costs and certain additional payments to ETP. ETP plans to use the proceeds to pay down debt and help fund its current growth projects, thereby greatly reducing its equity issuances. The transaction is expected to close in the fourth quarter of 2017, subject to customary closing conditions.

Upon closing, HoldCo will be owned 50.1 percent by Energy Transfer and 49.9 percent by Blackstone.

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