What the sale of Dominion Energy’s $ 1.9 billion Questar pipeline means for Utah customers

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SALT LAKE CITY – Dominion Energy has agreed to sell its Questar gas pipeline in the three western states, including Utah, to Southwest Gas Holdings in a deal worth more than $ 1.9 billion. dollars in cash and debt, the two companies said on Tuesday.

Under the terms, Las Vegas-based Southwest Gas agreed to pay $ 1.545 billion in cash and incur $ 430 million in debt related to the Questar pipeline. It is expected to be finalized by the end of the year, but must first be approved by the federal government under the Hart-Scott-Rodino Antitrust Improvements Act, Dominion spokesman Ryan Frazier said.

Dominion Energy, based in Richmond, Virginia, has acquired Questar Corp. – Utah’s largest natural gas supplier – in a $ 4.4 billion deal in 2016. The pipeline consists of more than 2,000 miles of pipelines and underground storage assets in Utah, Colorado and Wyoming, according to the company.

Dominion took control of Questar’s natural gas services after the 2016 deal. Frazier told KSL.com on Wednesday that this week’s pipeline deal would not impact service for the most part. customers from Utah.

“It does not affect public services,” he said of the deal. “It’s just the interstate pipeline system and (other assets).”

The pipeline will operate as a stand-alone subsidiary of Southwest Gas Holdings once the transaction is completed. Frazier added that there are about 240 employees affected by the sale; however, he wasn’t sure what the sale would mean for their employment status. KSL.com contacted Southwest Gas on Wednesday but did not receive a response until the post date.

This is not the first time Dominion has attempted to sell the Questar pipeline since its acquisition. He had agreed to sell the pipeline to Berkshire Hathaway Energy last year, but the deal fell through and the two companies agreed to end the sale in July.

The deal with Southwest Gas made corporate headlines when billionaire investor Carl Icahn announced he had bought shares in Southwest Gas and urged the company not to go through with the deal, CNBC reported Tuesday. The two companies announced the deal shortly after anyway.

“The acquisition of Questar Pipeline is a significant milestone for the business that we believe will bring significant financial and strategic benefits to our business, shareholders, employees and partners as we continue to grow. our role in the transitioning energy landscape significantly, ”said Southwest. Gas Holdings President and CEO John Hester in a statement Tuesday.

Dominion officials, in a statement Tuesday, said the proceeds from the sale would be used to “reduce parents’ debt, including repayment of the 364-day term loan made in July, which Dominion Energy had previously used to pay off. repay the roughly $ 1.3 billion. transaction filing made by Berkshire Hathaway Energy “and to support the company’s investment plan.

“This transaction represents another important step in our evolution as a business, allowing us to focus even more on meeting the energy needs of our utility customers and the continued growth of our clean energy portfolio, including the development of the largest offshore wind farm in North America, “said Robert Blue, President and CEO of Dominion Energy, in a statement.” We appreciate the focus and professionalism of the employees of Questar Pipelines, who have maintained safe operations and reliable We look forward to closing by the end of the year.

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