DTE Energy to Buy Natural Gas Gathering System, Pipeline for $2.25 billion
(Reuters) — DTE Energy’s midstream business said on Friday it would buy a natural gas gathering system and pipeline in Louisiana’s Haynesville shale for $2.25 billion in cash.
DTE Midstream will acquire the assets from Momentum Midstream and Indigo Natural Resources.
Assets that are part of the acquisition include an existing gathering system and a 150-mile gathering pipeline under construction, which will be in service in the second half of 2020. The primary assets gather natural gas produced in the Haynesville shale basin and access multiple major downstream pipelines, including those serving the Gulf Coast.
DTE Energy has looked to expand into natural gas pipelines and storage, which provides steady cash flows even during energy price swings, at a time when advanced energy efficiency measures have made the provision of electricity less lucrative for companies such as DTE.
The deal, which also includes a $400 million milestone payment upon completion of the gathering pipeline in the second half of 2020, will immediately add 15 cents to the company’s operating earnings per share in 2020.
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