Kinder Morgan Inc. and Brookfield Infrastructure Partners LP have agreed to sell a 25 percent minority interest in Natural Gas Pipeline Co. of America LLC (NGPL) to a fund controlled by ArcLight Capital Partners LLC for $830 million.
The proceeds will be shared equally between Kinder Morgan and Brookfield, according to a Feb. 22 joint statement. The transaction is expected to close in the first quarter of 2021.
The value of the minority interest implies an enterprise value of approximately $5.2 billion for NGPL. Upon closing, Kinder Morgan and Brookfield will each hold a 37.5 percent interest in NGPL, and Kinder Morgan will continue to operate the pipeline.
“Kinder Morgan and Brookfield Infrastructure are pleased to welcome ArcLight into the NGPL joint venture,” said Tom Martin, president of Kinder Morgan Natural Gas Pipelines. “We believe this investment shows the value of natural gas infrastructure both today and in the decades to come.”
For this transaction, NGPL is served by RBC Capital Markets as the exclusive financial adviser and King and Spalding as the legal advisor. Barclays served as the exclusive financial advisor to ArcLight and has provided a committed debt financing to ArcLight to support the transaction. Latham & Watkins LLP served as legal advisor to ArcLight.
NGPL is the largest transporter of natural gas into the high-demand Chicago-area market as well as one of the largest interstate pipeline systems in the country. It is also a major transporter of natural gas to large liquefied natural gas (LNG) export facilities and other markets located on the Texas and Louisiana Gulf Coast. NGPL has approximately 9,100 miles of pipeline, more than 1 million compression horsepower and 288 billion cubic feet (Bcf) of working natural gas storage. NGPL provides its customers access to all major natural gas supply basins directly and through its numerous interconnects with intrastate and interstate pipeline systems.