Dominion Midstream Partners, LP, has closed the previously announced acquisition of a 25.93% ownership interest in Iroquois Gas Transmission System, L.P.
Dominion Midstream issued approximately 8.6 million common units to affiliates of National Grid plc and New Jersey Resources Corporation to acquire their ownership interests in Iroquois.
Comments on the acquisition
Thomas F. Farrell II – Chairman, President and Chief Executive Officer of Dominion Resources, Inc. and Dominion Midstream GP, LLC – said: "This acquisition will help Dominion Midstream to achieve best-in-class distribution growth rates without having to drop additional Dominion-held assets into the partnership through the end of 2016. We are also excited that National Grid and New Jersey Resources have joined us as partners in Dominion Midstream."
Approximately 6.8 million units were issued to National Grid, and approximately 1.8 million units were issued to New Jersey Resources. National Grid and New Jersey Resources have agreed to certain transfer restrictions applicable to such units including, with certain exceptions, a general one year lockup period, and have been granted certain registration rights and piggyback registration rights with respect to future Dominion Midstream equity offerings. No public market issuance of units was made in connection with these transactions.
Ownership of Iroquois
Iroquois Gas Transmission System, L.P., is a Delaware limited partnership that owns and operates a 416 mile, FERC-regulated natural gas transmission pipeline extending from the Canada-United States border near Waddington, New York, travelling through New York and Connecticut.
The ownership stake in Iroquois is expected to contribute about US$20 million annually in cash flows to Dominion Midstream. The partnership expects that those cash flows and cash flows associated with Dominion Midstream's existing preferred equity interest in Cove Point and ownership of Dominion Carolina Gas Transmission will be sufficient to support annual cash distribution growth at Dominion Midstream at the targeted rate of 22% through 2016.
Dominion Midstream has no plans to acquire the 24.72% ownership interest in Iroquois currently held by Dominion Gas Holdings, LLC – a wholly owned subsidiary of Dominion Resources.
Edited from source by Stephanie Roker