Berkshire Hathaway to Acquire Dominion Energy’s 50% Stake in Cove Point LNG
(P&GJ) — A unit of Warren Buffett's Berkshire Hathaway announced that it has executed an agreement to purchase Dominion Energy’s 50% limited partnership stake in the Cove Point LNG facility in Maryland's Chesapeake Bay for $3.3 billion in cash.
The facility has an estimated storage capacity of 14.6 Bcf, and provides LNG to supplant coal-burning power plants and support energy needs in 28 countries, according to Berkshire Hathaway Energy.
Berkshire Hathaway Energy already operates the facility, and would upon closing have a 75% ownership stake, Reuters reported. A unit of Brookfield Infrastructure Partners owns the remaining 25%.
Cove Point is located in Lusby, Maryland, about 60 miles (97 km) southeast of Washington, D.C.
Subject to applicable regulatory approvals, the purchased interest will be held within BHE GT&S, LLC, a Berkshire Hathaway Energy business unit. A subsidiary of BHE GT&S is also the current general partner and operator of the Cove Point natural gas pipeline and its liquefied natural gas terminal located in Lusby, Maryland.
Dominion also expects to receive about $200 million from the termination of interest-rate derivatives. It plans to use sale proceeds to repay debt.
The transaction is subject to federal regulatory approval and expected to close by the end of 2023. If it failed to close under specified circumstances, Berkshire would owe Dominion a $150 million termination fee.
“We are proud of our operations at Cove Point and are excited for this opportunity to increase our ownership in these world-class facilities,” Paul Ruppert, BHE GT&S president, said. “The Cove Point team will continue to focus on providing safe, affordable and reliable service to its valued customers.”
This article includes information obtained by Reuters.
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