US energy infrastructure company Kinder Morgan has reached an agreement with energy group Southern Company to sell it a 50% stake in the Southern Natural Gas (SNG) pipeline system for a total enterprise value of approximately US$4.15bn (including debt). Kinder Morgan will continue to own a 50% stake in the pipeline and will continue to operate it.
SNG is a 12,230 km (7,600-mile) pipeline system connecting gas supply basins in Texas, Louisiana, Mississippi, Alabama and the Gulf of Mexico to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina and Tennessee. SNG is a principal transporter of natural gas to Alabama, Georgia and South Carolina, which are part of one of the fastest-growing natural gas demand regions in the United States.
The transaction is consistent with Southern Company's strategy to develop energy infrastructure in the United States and will improve its gas supply after its recent acquisitions, AGL Resources and PowerSecure. Pending approvals, the companies expect to complete the transaction in the third quarter or early in the fourth quarter of 2016.