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Warren Buffett’s Berkshire Hathaway Energy Acquires $3.3 Billion Stake in LNG Terminal
08/02/2023![Warren-Buffett-s-Berkshire-Hathaway-Energy-Acquires-3-3-Billion-Stake-in-LNG-Terminal](https://images2.rextag.com/public/blog/164Blog_Berkshire Hathaway Energy Acquires $3.3 Billion Stake in LNG Terminal.png)
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 $200 million from the termination of interest-rate derivatives, as stated in a separate statement.
- In the previous year, the Cove Point LNG plant achieved a significant milestone by shipping its 300th cargo since commencing commercial liquefaction operations in April 2018.
- The facility comprises an LNG import and export terminal situated in Calvert County, Maryland, along with associated pipeline facilities.
- With a storage capacity of 14.6 billion cubic feet, the plant has a daily send out capacity of 1.8 bcf (billion cubic feet) or approximately 5.25 million tons of LNG per year from a single liquefaction unit.
Located in Lusby, Maryland, approximately 60 miles southeast of Washington DC, Cove Point LNG has secured long-term contracts with notable companies such as Tokyo Gas Co. and Sumitomo Corp.
In a separate statement, Dominion revealed its intention to utilize the proceeds from the transaction to repay debt. As part of its ongoing business review, Dominion has announced plans to hold an investor day in the third quarter to provide an updated strategic and financial outlook.
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Vital Energy Raises Production Outlook and Capital Spending with Significant Permian Basin Acquisition
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/166Blog_Vital Energy Closes $362MM Permian Deal Acquired Forge Assets.png)
Vital Energy’s deal adds 24,000 net acres and 100 gross drilling locations in Texas, growing its Permian Basin footprint to around 198,000 net acres. Vital Energy is revising its projections for oil and gas production and capital spending upward following the successful acquisition of a substantial area in the Permian Basin. The company has gained around 24,000 net acres and 100 gross drilling locations in Texas. As a result of this deal, Vital Energy is now increasing its full-year production and capital spending guidance.
TC Energy sells 40% Stake in Columbia Gas Pipeline Systems for $3.9 Billion to GIP
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/Gas Pipeline Systems.jpg)
Calgary-based pipeline operator TC Energy is selling a 40% stake in its natural gas pipeline systems for $3.9 billion as part of its efforts to reduce debt. TC Energy Corporation (TRP) has agreed to sell a 40% stake in its Columbia Gas Transmission and Columbia Gulf Transmission systems to Global Infrastructure Partners (GIP). This move will help TC Energy reduce its debt and establish a valuable long-term partnership with GIP, a prominent infrastructure investor.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/297_Blog_Keystone XL Pipeline Controversy and Wildlife Disaster From Trump's Green Light to Biden's Red Light on the 15 Billion Project.jpg)
The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/282_Blog_Renewable Natural Gas How RNG Changes the Industry.jpg)
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/295_Blog_Renewable Efforts Lag as Global Oil and Gas Demand Continues to Rise.jpg)
Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.