Kinder Morgan, Inc. (KMI) and Brookfield Infrastructure Partners L.P. (BIP) have announced a definitive agreement whereby they will jointly acquire, from Myria Holdings, Inc., the 53 percent equity interest in Natural Gas Pipeline Company of America LLC (NGPL) not already owned by them for a total purchase price of approximately $242 million.
KMI will pay approximately US$136 million and increase its ownership interest from 20 percent to 50 percent, and Brookfield Infrastructure will pay approximately US$106 million and increase its ownership from approximately 27 percent to 50 percent. The transaction values NGPL at a total enterprise value of $3.4 billion, inclusive of existing debt.
NGPL, which is currently operated by KMI, is one of the largest interstate pipeline systems in the country, with approximately 9,200 miles of pipeline, more than 1 million horsepower of compressor facilities and 288 billion cubic feet of working gas storage.
The transaction is expected to close later this year, and is subject to customary closing conditions, including regulatory approval. KMI will continue to operate NGPL, and expects that the transaction will be immediately accretive to KMI’s cash available to pay dividends.
Evercore acted as strategic advisor to KMI; both Bracewell & Guiliani and Weil, Gotshal & Manges acted as legal counsel to KMI. Cleary Gottlieb Steen & Hamilton acted as legal counsel to Brookfield Infrastructure.
KMI Chief Executive Officer Steve Kean, stated:
“We are extremely pleased to announce an agreement to acquire full ownership of NGPL in partnership with Brookfield. This partnership ensures that NGPL is positioned to take full advantage of future opportunities to provide natural gas transportation and storage services to its current and future customers.”
Sam Pollock, Chief Executive Officer of Brookfield Infrastructure, commented:
“We are delighted to be strengthening our relationship with Kinder Morgan,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure. “We look forward to working together to execute NGPL’s growth strategy to achieve its potential.”