Consolidated Edison, Inc. and Crestwood Equity Partners LP today announced that their subsidiaries entered into definitive agreements to form a joint venture to own and develop Crestwood's existing natural gas pipeline and storage business located in northern Pennsylvania and southern New York.

"These premier natural gas pipelines and storage facilities provide a critical link between robust natural gas supply sources and Northeast US demand markets," Consolidated Edison, Inc. said

Subject to customary closing conditions and purchase price adjustments, Crestwood will contribute its existing natural gas pipeline and storage business to a new entity, Stagecoach Gas Services LLC, and a subsidiary of Con Edison Transmission, Inc., which is a wholly-owned subsidiary of Consolidated Edison, Inc., will purchase a 50 percent equity interest in Stagecoach Gas Services for approximately $975 million, with an implied market value of almost $2 billion.

Consolidated Edison, Inc. intends to finance the transaction with a combination of debt and new equity that is consistent with its capital structure.

The transaction is expected to be substantially completed in the second quarter of 2016.

Stagecoach Gas Services, which will be managed by Crestwood and operated by a newly formed services company, will own four natural gas storage facilities (Stagecoach, Thomas Corners, Steuben and Seneca Lake) with a combined storage capacity of approximately 41 Bcf and three natural gas pipelines (MARC I, North/South and the East Pipeline) with a combined throughput capacity of 2,960 Mmcf per day.

"The assets boast a highly strategic asset footprint situated between robust Northeast natural gas supply sources and several leading U.S. natural gas demand centers, including New York City and New England," the companies said

Tags:
Natural Gas   M&A   Consolidated Edison   New York  

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