Southern Company has announced the closing of their natural gas pipeline venture through Southern Company’s acquisition of a 50 percent equity interest in the Southern Natural Gas pipeline system through a subsidiary of Southern Company Gas. As previously announced, Kinder Morgan will continue to operate the system and the companies are pursuing specific growth opportunities to develop additional natural gas infrastructure for the strategic venture.
SNG is an approximately 7,000-mile pipeline system connecting natural gas supply basins in Texas, Louisiana, Mississippi and Alabama to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina and Tennessee. SNG is a principal transporter of natural gas to Alabama, Georgia and South Carolina, which are part of one of the fastest-growing natural gas demand regions in the United States.
Southern Company Chairman, President and CEO Thomas A. Fanning, said:
“This strategic venture aligns with Southern Company’s previously discussed infrastructure development strategy and builds on Southern Company Gas’ midstream pipeline experience. With our new ownership stake in Southern Natural Gas we look forward to working with Kinder Morgan to explore future opportunities to deliver natural gas to customers.”
Norman G. Holmes, president of Kinder Morgan South Region Pipelines said:
“The Southern Company system has been a valued customer of SNG for many years and this joint venture is expected to greatly benefit the shareholders of both companies. We are very pleased to begin pursuing the growth opportunities this strategic relationship should provide.”
Kinder Morgan plans to use all of the proceeds from this transaction to reduce debt at Kinder Morgan.
Jones Day, Gibson Dunn & Crutcher LLP, Troutman Sanders LLP and Balch & Bingham LLP are serving as legal counsel to Southern Company, and Bracewell LLP and Weil, Gotshal & Manges LLP are serving as legal counsel to Kinder Morgan.