Warren Buffet to take over of Cove Point LNG by November

Monday, 05 October 2020
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US billionaire investor Warren Buffett is expected to take control of Dominion Energy’s Cove Point LNG export plant in Maryland around November 1, 2020. In return, Dominion will receive about $2.7 billion in cash and transfer $5.3 billion of existing Dominion Energy Gas Holdings related indebtedness to the buyer – Buffets’ Berkshire Hathaway Energy.

The Cove Point liquefaction plant produces around 5.2 mtpa from a single Train and has tolling agreements with Gas Authority of India (GAIL) as well as Sumitomo and Tokyo Gas of Japan.

Dominion is also hoping to close another part of the sale, involving Questar Pipelines, upon receipt of anti-trust clearance on in early 2021. For that transaction, Dominion would receive around $1.3 billion in cash and transfer around $430 million of existing Questar Pipelines indebtedness to Berkshire Hathaway.

“This mutually agreed dual-phase closing is the result of updated timing expectations for receipt of the HSR clearance from the Federal Trade Commission related exclusively to the sale of Questar Pipeline and Overthrust Pipeline,” explained Dominion. “Given all closing conditions have been met (…), Dominion Energy and Berkshire Hathaway Energy have opted to move forward with an expeditious initial closing to be followed with a subsequent Questar Pipelines closing in early 2021.”

Irrespective of the sale, Dominion said it still expects to have strong end-of-year performance with operating earnings per share, normalized for weather, to be in the top half of its $3.37 to $3.60 guidance range.

Cove Point LNG closed for maintenance

Dominion Energy’s Cove Point LNG plant in Maryland has been closed for three weeks maintenance as US investor Warren Buffet is waiting to take control. Berkshire Hathaway’s energy unit has snapped up a 25 percent operating stake in the 5.2 mtpa Cove Point facility.

With the Cove Point deal, Buffett was concluding his first big acquisition since 2015. The Dominion-Berkshire Hathaway transaction is expected to close in the fourth quarter of 2020.

The US business tycoon and philanthropist Buffet earlier in 2020 made a move for an LNG and pipeline natural gas project

in Canada. But at the last minute he pulled out of the $6.7 billion LNG project deal in Quebec over concerns about infrastructure challenges.

While Berkshire Hathaway will control Cove Point LNG, another 25 percent of the liquefaction and export plant is already owned by Brookfield Asset Management of Canada under a deal finalized in October 2019. After the November closing of the transaction Dominion will retain a 50 percent passive stake in Cove Point. 

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