NextEra Energy Partners, LP (NYSE: NEP) will acquire Meade Pipeline Co. LLC and its interests in the Central Penn Line in a deal valued at USD 1.37 Billion. The transaction also includes roughly USD 90 Million in future capital contributions through 2022 tied to an expansion opportunity at the existing pipeline.
Meade Pipeline owns a 39.2% interest in the Central Penn Line, a 185-mile intrastate natural gas pipeline that stretches mainly through Pennsylvania and provides natural gas to the mid-Atlantic and southeastern U.S.
Funding for the expansion is expected to be financed with a total of USD 820 Million of project debt, including a USD 60 Million draw that is expected at the closing of the transaction and which is in addition to the USD 760 Million in project debt. The Company is seeking to close the transaction within the next two months.
“We are pleased to have reached a definitive agreement to acquire Meade Pipeline and its interests in the Central Penn Line, which is backed by an attractive fixed-lease payment with a high-credit quality customer, and further expand NextEra Energy Partners’ investment in long-term contracted natural gas pipelines, helping mitigate any potential resource volatility in the portfolio,” said Jim Robo, Chairman and Chief Executive Officer of NextEra Energy Partners.
NextEra Energy Partners, a subsidiary of Juno Beach-based NextEra Energy, Inc. (NYSE: NEE), said the pipeline is backed by a minimum 14-year contract from Houston-based Transcontinental Gas Pipe Line Co.
The acquisition is expected to yield a double-digit return to NextEra Energy Partners’ unitholders and generate a cash available for distribution yield of roughly 14%.
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