Brookfield Infrastructure Partners has agreed to sell entities that hold its complete 25% minority stake in NGPL Holdings (NGPL Holdings), the indirect parent company of PipeCo, to one or more funds controlled by ArcLight Capital Partners.
Following the completion of the deal, ArcLight funds will hold a 62.5% stake in NGPL Holdings.
Kinder Morgan will continue to operate PipeCo’s pipeline assets and hold a 37.5% stake in NGPL Holdings.
Subject to customary closing conditions, the deal is expected to close in the second quarter of 2025.
This divestment marks Brookfield Infrastructure Partners’ full exit from the business, generating more than $1.7bn (C$2.43bn) in total proceeds and realising an 18% internal rate of return (IRR).
Initially, Brookfield acquired a 27% stake in the pipeline through the acquisition of Babcock & Brown Infrastructure.
In 2015, Brookfield raised its ownership to 50%, teaming up with another operator to purchase a consortium of minority stakeholders, thus recapitalising the business.
In June 2023, ArcLight Capital Partners’ affiliate acquired an additional 12.5% stake in NGPL from Brookfield Infrastructure Partners. This took ArcLight’s stake in NGPL to 37.5% and Brookfield Infrastructure’s interest to 25%, with Kinder Morgan holding a 37.5% stake.
For the latest transaction, Brookfield Infrastructure enlisted CIBC Capital Markets and RBC Capital Markets as joint financial advisors, with Vinson & Elkins serving as legal advisor.
Natural Gas Pipeline Company of America (NGPL) is an indirectly wholly owned subsidiary of NGPL Holdings and PipeCo.
It transports natural gas to Chicago and is also said to have one of the largest interstate pipeline systems in the US.
NGPL carries natural gas to large liquefied natural gas export facilities and other markets on the Texas and Louisiana Gulf Coast.
It has around 9,100 miles of pipeline, more than one million horsepower of compression and 288 billion cubic feet of natural gas storage.
NGPL claims it provides customers with direct access to all significant natural gas supply basins, as well as through numerous interconnections with both intrastate and interstate pipeline systems.
