Dominion Energy Announces Agreement to Sell Questar Pipelines to Southwest Gas

Rhea-AI Summary

Dominion Energy (NYSE: D) has signed a definitive agreement to sell Questar Pipelines to Southwest Gas Holdings Inc. for $1.975 billion, including $430 million in debt. This transaction focuses on its FERC-regulated assets in Utah, Wyoming, and Colorado, expected to close in Q4 2021, pending regulatory approvals. Proceeds will reduce parent-level debt and support Dominion's capital plan for major decarbonization efforts. The sale aligns with the company’s strategy to enhance its clean-energy portfolio and utility service capabilities.

Positive

• The sale of Questar Pipelines allows Dominion to focus on its utility customers and clean-energy portfolio.
• Proceeds from the sale will be used to reduce debt and support robust capital plans.
• Transaction valued at $1.975 billion strengthens financial position.

Negative

• Regulatory approvals are required, which could delay the transaction.
• Questar Pipelines will be accounted for as discontinued operations, impacting revenue streams.

RICHMOND, Va., Oct. 5, 2021 /PRNewswire/ -- Dominion Energy (NYSE: D) announced today execution of a definitive agreement to sell Questar Pipelines to Southwest Gas Holdings Inc. (NYSE: SWX), in a transaction valued at $1.975 billion, including the assumption of $430 million of existing indebtedness. Questar Pipelines consists of FERC-regulated, long-term contracted, transportation and underground storage assets in Utah, Wyoming and Colorado, together with related services and processing entities. The transaction is expected to close in the fourth quarter of 2021, subject to regulatory approvals.

Robert M. Blue, Dominion Energy chair, president and chief executive officer, said:

"We are pleased with the result of our sale process for these high-quality assets. This transaction represents another significant step in our evolution as a company, allowing us to focus even more on fulfilling the energy needs of our utility customers and continuing growth of our clean-energy portfolio, including development of the largest offshore wind farm in North America. We appreciate the focus and professionalism of the Questar Pipelines employees, who have maintained safe and reliable operations. We look forward to closure by year's end."

Today's announcement does not change Dominion Energy's existing financial guidance. Questar Pipelines will continue to be accounted for as discontinued operations. Proceeds from the sale will be used by Dominion Energy to reduce parent-level debt, including retiring the 364-day term loan that was entered into in July, which Dominion Energy previously used to repay the approximately $1.3 billion transaction deposit made by Berkshire Hathaway Energy. Proceeds from the sale of Questar Pipelines will also be used to support Dominion Energy's robust regulated capital plan, as part of the largest regulated decarbonization opportunity in the country.

McGuireWoods LLP served as legal counsel to Dominion Energy. Barclays acted as the company's financial advisor. 

About Dominion Energy

More than 7 million customers in 16 states energize their homes and businesses with electricity or natural gas from Dominion Energy (NYSE: D), headquartered in Richmond, Va. The company is committed to sustainable, reliable, affordable and safe energy and to achieving net zero carbon dioxide and methane emissions from its power generation and gas infrastructure operations by 2050. Please visit DominionEnergy.com to learn more. 

This release contains certain forward-looking statements with respect to the sale of Dominion Energy Questar Pipeline, LLC, and associated entities, and the use of the proceeds of such sale, which are subject to various risks and uncertainties. Factors that could cause actual results to differ include but are not limited to: the risk that Dominion Energy and Southwest Gas may be unable to obtain any necessary regulatory approvals for the transaction or that required regulatory approvals may delay the transaction and the risk that any conditions to the closing of any of the transaction may not be satisfied.  Other risk factors are detailed from time to time in Dominion Energy's quarterly reports on Form 10-Q and most recent annual report on Form 10-K filed with the Securities and Exchange Commission.  These forward-looking statements speak only as of the date of this press release. Dominion Energy assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this press release.

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SOURCE Dominion Energy

FAQ

What was the value of the sale of Questar Pipelines by Dominion Energy?

The sale of Questar Pipelines was valued at $1.975 billion.

When is the expected closing date for the Questar Pipelines sale?

The transaction is expected to close in the fourth quarter of 2021.

What will Dominion Energy do with the proceeds from the Questar Pipelines sale?

Proceeds will be used to reduce debt and support Dominion's regulated capital plan.

What impact will the Questar Pipelines sale have on Dominion Energy's financial guidance?

Today's announcement does not change Dominion Energy's existing financial guidance.

What are the risks associated with the sale of Questar Pipelines?

The sale is subject to regulatory approvals, which could potentially delay the transaction.