Duke, Dominion cancel contested Atlantic Coast Pipeline
Dominion Energy, which is headquartered in Richmond, Virginia, and serves more than 7 million customers in 20 states, announced it had agreed to sell “substantially all” of its gas transmission and storage segment assets to an affiliate of Berkshire Hathaway.
American investment mogul Warren Buffet’s Berkshire Hathaway, which already manages more than $100 billion in assets in the energy sector, will pay Dominion Energy $4 billion in cash and take over $5.7 billion in debt.
This is the first major acquisition for Buffett’s holding company - known for its equity investments in large companies at difficult times - since the start of the coronavirus pandemic and the ensuing economic crisis.
Meanwhile, Dominion Energy and Duke Energy announced on July 5 they had dropped plans to build a controversial natural gas pipeline through mountains in the eastern United States.
The two companies announced in 2014 plans to build the Atlantic Coast Pipeline that was intended to provide natural gas supplies to growing markets in Virginia and North Carolina.
But “ongoing delays and increasing cost uncertainty... threaten the economic viability of the project,” the two companies said in a joint statement.
Due to the legal issues, the project’s anticipated cost as increased from $4.5 or $5 billion to $8 billion, they said.
In addition to dropping the project, Dominion Energy intends to sell 7,700 miles (12,400 kilometers) of pipeline as well as 25.5 billion cubic meters of natural gas storage space to Buffett’s holding company, Berkshire Hathaway.
The deal also includes the transfer of 25 percent of the Cove Point terminal in Maryland, on the US East Coast, from where natural gas is exported abroad