Pipeline operator Kinder Morgan (KMI) and Brookfield Infrastructure Partners have agreed to jointly divest a 25% stake in Natural Gas Pipeline Company of America (NGPL) for $830m to a fund controlled by ArcLight Capital Partners.
NGPL comprises nearly 14,645km of pipeline and is said to be the largest transporter of natural gas into the Chicago-area market.
Upon the completion of the deal, Kinder Morgan and Brookfield Infrastructure will each hold a 37.5% interest in NGPL, while Kinder Morgan will continue to operate the pipeline project.
The transaction, which is planned to be closed in the first quarter of 2021, values 100% of the natural gas pipeline system at approximately $5.2bn.
The proceeds from the sale will be shared equally by KMI and Brookfield Infrastructure.
Kinder Morgan natural gas pipeline president Tom Martin said: “Kinder Morgan and Brookfield Infrastructure are pleased to welcome ArcLight into the NGPL joint venture.
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By GlobalData“We believe this investment shows the value of natural gas infrastructure both today and in the decades to come.”
The NGPL system has more than one million compression horsepower and working natural gas storage of 288 billion cubic feet (Bcf).
Additionally, the pipeline system procures gas from liquefied natural gas (LNG) export facilities and other markets across the Texas and Louisiana Gulf Coast.
In a separate announcement, Brookfield Infrastructure Partners has formally launched a bid to acquire Canadian pipeline transport company Inter Pipeline.
Brookfield Infrastructure is offering $16.50 per share in cash or 0.206 of a Brookfield Infrastructure class A exchangeable share, valuing Inter Pipeline at C$7.08bn ($5.62bn).
Last month, Brookfield Infrastructure Partners, together with its institutional partners, offered to fully acquire Inter Pipeline in a deal valued at C$13.5bn ($10.65bn).
The offer, however, was later turned down by Inter, which later launched a strategic review of options, according to Reuters.
As the largest investor in IPL, Brookfield currently holds 19.65% of all issued and outstanding shares in the Canadian pipeline company.
