#gas#acquisitions#US

Berkshire Hathaway Energy buys Dominion Energy gas & storage

Deal hailed as a "great fit" and will deliver clean, low-cost and sustainable energy solutions to customers and communities

Dominic Ellis
|Nov 3|magazine8 min read

Berkshire Hathaway Energy has completed the purchase of Dominion Energy’s natural gas transmission and storage business, exclusive of Questar Pipeline Group.

Officially the "transaction consideration" was $8 billion, including approximately $2.7 billion in cash (subject to certain adjustments) and the assumption of approximately $5.3 billion in debt, though several US media reports put the figure closer to $10 billion, including $4 billion in cash and $5.7 billion in existing debt.

In a statement, Dominion Energy said operations include more than 5,500 miles of interstate gas transmission pipelines, about 775 billion cubic feet (Bcf) of gas storage that the company operates and an operating 25 percent stake in Cove Point – an LNG export, import and storage facility in Maryland that Berkshire Hathaway Energy will now operate. 

The transaction received antitrust clearance under the Hart-Scott-Rodino Act from the Federal Trade Commission in October 2020, and approval to transfer existing licenses from the Federal Communications Commission and Department of Energy earlier this year.

“We are pleased to welcome the natural gas transmission and storage business and its employees to Berkshire Hathaway Energy,” said Greg Abel, Berkshire Hathaway’s vice chairman, non-insurance operations, and Berkshire Hathaway Energy chairman. “With shared values and priorities, the business is a great fit within our organization and will play an important role in our long-term plan to deliver clean, low-cost and sustainable energy solutions to customers and communities.”

In July, Berkshire Hathaway Energy reached an agreement to acquire substantially all of Dominion Energy’s gas transmission and storage operating segment assets. On September 30, Dominion Energy announced a dual-phase closing for the transaction as a result of updated timing expectations for receipt of the antitrust clearance from the Federal Trade Commission related exclusively to the sale of Questar Pipeline Group. 

On October 5, the companies entered into a second agreement providing for Berkshire Hathaway Energy’s purchase of Questar Pipeline Group from Dominion Energy Questar Corporation. The second transaction is subject to regulatory approvals and is expected to close in early 2021.

The sale of the company's interests in the Questar Pipelines, also to Berkshire Hathaway Energy, is expected to be completed in early 2021 following receipt of Hart-Scott-Rodino clearance. The company has received a cash payment of approximately $1.3 billion in anticipation of the sale of these interests, and will transfer approximately $430 million of related debt to Berkshire Hathaway Energy upon close of this follow-on transaction.

From its roots in renewable energy, Berkshire Hathaway Energy - the energy unit of Warren Buffett's conglomerate - has grown into a $104.4 billion portfolio of locally managed businesses.

The announcement coincides with Dominion Energy Virginia proposing its largest slate of new solar projects as the company turns its attention to clean energy.

The nine solar facilities would bring nearly 500 megawatts (MW) of new renewable energy to customers, enough to power around 125,000 homes at peak output. The proposal comes just months after enactment of the Virginia Clean Economy Act (VCEA) and builds on what is already the third-largest solar portfolio among utility holding companies in the US.

"This filing is another concrete step toward our commitment to bring more renewable energy to Virginia and build a clean, sustainable future for our customers and our Commonwealth," said Ed Baine, president - Dominion Energy Virginia. "We are focused on adding significant renewable energy resources, such as solar and wind, over the next 15 years while maintaining our commitment to excellent reliability and delivering an excellent value to our customers."

Berkshire Hathaway Energy statement
Energy Digital magazine