BERKSHIRE Hathaway Inc said its energy unit will buy Dominion Energy Inc’s natural gas transmission and storage network for US$4 bil (RM17.2 bil) , helping billionaire Chairman Warren Buffett reduce his conglomerate’s cash pile while letting Dominion focus on utilities operations.
The transaction announced on Sunday includes more than 12,390km of natural gas transmission lines and 900 billion cubic feet of gas storage.
Berkshire Hathaway Energy is buying Dominion Energy Transmission, Questar Pipeline, Carolina Gas Transmission, 50% of the Iroquois Gas Transmission System, and 25% of the Cove Point liquefied natural gas facility in Maryland.
Dominion will retain 50% of Cove Point. Brookfield Asset Management Inc owns 25%.
The Berkshire unit will also assume US$5.7 bil of debt, giving the transaction a US$9.7 bil enterprise value. It expects a fourth-quarter closing, pending regulatory approvals.
“We are very proud to be adding such a great portfolio of natural gas assets to our already strong energy business,” Buffett said in a statement.
Dominion expects up to 90% of future operating earnings to come from utilities.
The company and Duke Energy Inc separately announced on Sunday they would abandon their US$8 bil Atlantic Coast Pipeline, running under the Appalachian Trail and through West Virginia, Virginia and North Carolina.
Dominion and Duke cited delays and uncertain costs, despite a favourable US Supreme Court decision last month.
Berkshire controls 91.1% of Berkshire Hathaway Energy, which owns the MidAmerican Energy, NV Energy and PacifiCorp utilities, natural gas pipelines, wind power assets and electricity businesses in Britain and Canada.
The unit accounted for 12% of Berkshire’s US$23.97 bil of operating profit in 2019. Its chairman, Greg Abel, is also a Berkshire vice-chairman.
Berkshire ended March with US$137.2 bil of cash, reflecting Buffett’s four-year inability to find major acquisitions, even as the coronavirus pandemic took hold and stock prices plunged.
Berkshire Hathaway Energy declined additional comment. – July 6, 2020, Reuters
