NextEra Energy Partners will acquire Meade Pipeline and its interest in the Central Penn Line for $1.37 billion.
The agreement includes $90 million in future capital contributions through 2022, which are related 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 is an integral part of a pipeline system regulated by the Federal Energy Regulatory Commission that provides the Marcellus natural gas producing region across to large demand centres in the mid-Atlantic and Southeastern regions of the US.
The pipeline has the capacity to transport and deliver up to 1.7 billion cubic feed of natural gas per day. The pipeline, which is backed by a minimum 14-year contract with an investment-grade-equivalent customer, is jointly owned by Transcontinental Gas Pipe Line Company, which operates the pipeline as a segment of its larger Atlantic Sunrise project.
Central Penn is a long-term contracted natural gas pipeline that is a critical resource to transport low-cost Marcellus natural gas to Mid-Atlantic demand centres.
Jim Robo, chairman and CEO of NextEra Energy, says: '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.
'Meade Pipeline is a very attractive acquisition for NextEra Energy Partners, and is expected to yield a double-digit return to NextEra Energy Partners' limited partner unitholders and generate a cash available for distribution yield of roughly 14%.'