NextEra Energy Partners, one of the biggest renewable-energy companies in the United States, has agreed to buy Meade Pipeline Co., an owner of a pipeline that provides gas from Pennsylvania, in a deal valued at about $1.37 billion.
The deal will help expand NextEra’s investment in long-term contracted natural gas pipelines, “helping mitigate any potential resource volatility in the portfolio,” said NextEra CEO Jim Robo in a statement.
NextEra Energy Partners already owns pipelines in Texas, reports Bloomberg. The investor owned 5 gigawatts of renewables as of mid-June.
“It is slightly surprising that NEP doubled-down on gas exposure,” Pavel Molchanov, an analyst at Raymond James, said in a Bloomberg interview Sept. 30. “This is not what the company has generally been focused on.”
The deal includes about $90 million in future capital contributions through 2022. Meade Pipeline owns a 39.2 percent interest in Central Penn Line, which is a 185-mile intrastate natural gas pipeline that provides the Marcellus natural gas producing region access to the mid-Atlantic and Southeastern regions of the United States.
Meade Pipeline is a private joint venture between AltaGas Ltd.’s unit WGL Midstream, Cabot Oil & Gas Corp., and EIF Vega Midstream. It is majority owned by Transcontinental Gas Pipe Line Co., which operates it as part of its Atlantic Sunrise project.
While AltaGas will sell its stake in the pipeline to Meade for $656.85 million, Cabot said it will sell its 20 percent stake in Meade to NextEra for about $256 million.
The deal is expected to close within the next 60 days, and it includes a $90 million expansion project expected to be completed in mid-2022. The Marcellus is the biggest source of U.S. natural gas.
