Brookfield acquires 25-percent stake in $8B Dominion Energy LNG facility at Chesapeake Bay

Cove Point LNG facility. (Photo courtesy Dominion Energy)

Dominion Energy is selling a quarter stake in its East Coast liquefied natural gas (LNG) facility for more than $2 billion.

Brookfield Super-Core Infrastructure Partners will pay to obtain a 25-percent non-controlling equity interest in Dominion’s Cove Point LNG LP. The Dominion entity owns a LNG import, export and storage facility on the western shore of Chesapeake Bay in Maryland.

The Brookfield infrastructure fund’s investment will total a little more than $2 billion in cash consideration, excluding working capital. The transaction also gives Cove Point an implied capital value of more than $8 billion.

The deal is part of Dominion’s previously announced intention to established a permanent capital structure for Cove Point.

“The agreement highlights the compelling intrinsic value of Cove Point and allows us to efficiently redeploy capital toward our robust regulated growth capital programs,” Dominion CEO Thomas Farrell said in a statement. “We are very excited to have a highly respected infrastructure investor such as Brookfield as our partner in this world-class facility.”

These assets provide liquefaction, gasification, transportation, storage and peaking gas supply services to customers in the United States, India and Japan. It also includes a 136-mile pipeline that interconnects the facility with the U.S. interstate pipeline system.

In 2018, the company completed a $4.1 billion expansion to enable natural gas exports.

The Cove Point transaction with Brookfield is expected to close by the end of this year. Dominion Energy will retain full operational control of the facility and its services, and current employees and customers will not be affected by the recapitalization agreement.

Utilities such as Dominion, AES and Sempra are investing in LNG projects.

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LNG export projects tying U.S. natural gas to customers throughout the world will be part of the content at POWERGEN International happening Nov. 19-21 in New Orleans. The Natural Gas Knowledge Hub will feature sessions on projects involving Vietnam, the Caribbean and globally.

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