Berkshire Hathaway Energy to purchase Dominion Energy LNG stake for over $3 billion
(WO) – Dominion Energy has concluded a robust and competitive sale process and executed a definitive agreement to sell its 50% noncontrolling limited partner interest in Cove Point LNG, LP, to Berkshire Hathaway Energy, which currently operates the facility and owns a 100% general partner and 25% limited partner interest.
The total transaction value of $3.5 billion, inclusive of transaction proceeds ($3.3 billion) and expected proceeds from the termination of related interest rate derivatives ($0.2 billion), represents approximately 10.8x estimated 2025 EBITDA of $325 million for Dominion Energy's 50% noncontrolling interest in Cove Point LNG.
Associated with repaying the term loan, the company will unwind its related in the money "floating-to-fixed" interest rate derivative which is expected to result in proceeds to the company of approximately $200 million.
Robert M. Blue, Dominion Energy chair, President, and Chief Executive Officer, said, "Since 2002, Cove Point has been an excellent service provider to its international and domestic customers – linking global gas supplies with American customers, and American gas supplies with customers around the world.
"However, this investment is non-core to Dominion Energy as we focus on our state-regulated utility operations. The sale demonstrates our commitment to the company's credit profile and represents an attractive exit from what has been an excellent investment for our shareholders. With this sale, we have recycled $8.9 billion of cash flow, including dividends from Cove Point, since 2018 — well in excess of our total investment in the facility inclusive of the export project construction cost of approximately $4.1 billion. Further, this sale gives us the opportunity to reduce variable rate debt consistent with our goal of strengthening our balance sheet."