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Warren Buffett’s Berkshire Hathaway Energy Acquires $3.3 Billion Stake in LNG Terminal08/02/2023
One of Warren Buffett's Berkshire Hathaway subsidiaries is set to raise its ownership in the Cove Point liquefied natural gas (LNG) export terminal located in Maryland. This comes after the company signed a substantial $3.3 billion agreement with Dominion Energy.
Under the agreement, Dominion Energy has agreed to sell its 50 percent noncontrolling limited partner interest in Cove Point LNG to Berkshire Hathaway Energy. Berkshire Hathaway Energy is the current operator of the facility and already holds a 100 percent general partner interest and a 25 percent limited partner interest.
Upon the completion of the deal, Berkshire Hathaway Energy will have a 75 percent limited partnership stake in Cove Point LNG, while a subsidiary of Brookfield Infrastructure Partners will retain the remaining 25 percent limited partnership interest in the terminal.
The newly acquired interest in Cove Point LNG will be held within BHE GT&S, which is a business unit of Berkshire Hathaway Energy.
Berkshire Hathaway Increases Cove Point LNG
- The $3.3 billion transaction will be funded through cash on hand, including proceeds from the liquidation of certain investments, according to Berkshire Hathaway.
- Dominion expects to receive approximately $200 million from the termination of interest-rate derivatives, as stated in a separate statement.
- In the previous year, the Cove Point LNG plant achieved a significant milestone by shipping its 300th cargo since commencing commercial liquefaction operations in April 2018.
- The facility comprises an LNG import and export terminal situated in Calvert County, Maryland, along with associated pipeline facilities.
- With a storage capacity of 14.6 billion cubic feet, the plant has a daily send out capacity of 1.8 bcf (billion cubic feet) or approximately 5.25 million tons of LNG per year from a single liquefaction unit.
Located in Lusby, Maryland, approximately 60 miles southeast of Washington DC, Cove Point LNG has secured long-term contracts with notable companies such as Tokyo Gas Co. and Sumitomo Corp.
In a separate statement, Dominion revealed its intention to utilize the proceeds from the transaction to repay debt. As part of its ongoing business review, Dominion has announced plans to hold an investor day in the third quarter to provide an updated strategic and financial outlook.
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