CorEnergy Completes $175 Million Sale of MoGas, Omega Pipeline Systems to Spire
(P&GJ) — CorEnergy Infrastructure Trust, Inc. has closed the sale of its MoGas and Omega pipeline systems to Spire Midstream, a subsidiary of Spire Inc.
The MoGas System is a 263-mile interstate natural gas transmission and distribution system providing service to markets in Missouri and Illinois. MoGas has pipeline interconnections with Mississippi River Transmission Corp., Panhandle Eastern Pipe Line Co., Rockies Express Pipeline, and Spire STL Pipeline for receipt and distribution of gas.
Through a long-term agreement with the Department of Defense, Omega is a 75-mile natural gas distribution line that primarily serves the U.S. Army's Fort Leonard Wood in central Missouri. Additionally, Omega offers natural gas marketing services to a number of nearby clients.
“The sale of our MoGas and Omega systems enables us to significantly de-leverage our balance sheet and strengthen our overall capital structure,” Dave Schulte, chairman and CEO of CorEnergy, said in May when the deal was first announced. “This is one of several 2023 initiatives we are undertaking to improve our balance sheet and operating results, including proposed tariff increases and corporate cost reductions.”
In an all-cash transaction valued at $175 million, along with working capital adjustments, the net proceeds amounted to approximately $165 million after factoring in taxes and transaction-related costs. Upon closing the deal, CorEnergy fulfilled the repayment and cancellation of the Crimson Pipeline credit facility, totaling $109 million. Consequently, the completion of this transaction leaves Crimson Pipeline as the sole remaining operation under CorEnergy's portfolio.
“We want to thank our dedicated MoGas and Omega associates, who will continue supporting Spire to provide safe transportation of critical supplies of natural gas to customers in Missouri,” Dave Schulte, chairman and CEO of CorEnergy, said. “These companies were the last remaining legacy operations from our predecessor corporation and were included in our groundbreaking qualification for REIT status. Our stockholders realized significant benefit from our ownership of these assets over the years, and we are confident that Spire is the right owner for them moving forward.”
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