Dominion to sell gas assets in pursuit of sustainable utility profile

Dominion Energy Inc (NYSE:D) has agreed to sell substantially all assets in its Gas Transmission & Storage segment as it wants to establish itself as a "pure-play" state-regulated utility with a focus on sustainability.

The buyer in this newly announced transaction worth a total of USD 9.7 billion (EUR 8.6bn) is an affiliate of Berkshire Hathaway Inc (NYSE:BRK.A), which will pay USD 4 billion in cash upon closing and assume some USD 5.7 billion of existing indebtedness.

Under the terms of the deal, Dominion is offloading more than 7,700 miles of natural gas storage and transmission pipelines along with around 900 billion cubic feet of gas storage. The transaction does not include the company’s renewable natural gas activities.

Closing is subject to regulatory clearance and is seen to occur in the final quarter of the year. Dominion intends to use the proceeds from the sale to repurchase common stock.

"Over the next 15 years we plan to invest up to USD 55 billion in emissions reduction technologies including zero-carbon generation and energy storage, gas distribution line replacement, and renewable natural gas. In addition, between 2018 and 2025 we expect to retire more than four gigawatts of coal- and oil-fired electric generation,” stated Thomas F Farrell, the chairman, president and CEO of Dominion Energy.

Farrell added that the planned narrowing of focus will enable the company to raise its long-term earnings growth rate guidance by around 30%.

Dominion’s expectations are that up to 90% of its future operating earnings will be generated by its portfolio of electric and natural gas state-regulated utilities operating in Virginia, the Carolinas, Ohio and Utah. The company will also operate a zero-carbon nuclear and solar contracted generation fleet as part of its non-state regulated utility activities.

(USD 1.0 = EUR 0.886)

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