LNG

Occidental Petroleum, the Houston-based company with US oil and gas assets and Warren Buffett as a main shareholder as well as owning oil and natural gas stakes in Algeria, Oman and the United Arab Emirates, has agreed to buy US Permian Basin-focused energy producer CrownRock in a cash and stock deal valued at $12 billion including debt.

Enbridge Inc, the Canadian-based pipeline and energy company, has agreed to acquire three natural gas businesses from US utility and renewables-focused Dominion Energy in transactions valued at US$14 billion (C$19Bln) to create the largest North American gas utility franchise.

The Berkshire Hathaway Energy group of US investor Warren Buffett has acquired the 50 percent of the Cove Point LNG plant in Maryland it didn’t already own for $3.3 billion from US utility Dominion Energy.

Dominion had a 50 percent non-controlling limited partner interest in Cove Point LNG and this is now owned by Berkshire Hathaway Energy, which already operates the facility.

Berkshire Hathaway Energy confirmed the acquisition for $3.3Bln and said it would now own a 75 percent limited partnership stake in Cove Point LNG LP.

It added that a subsidiary of Brookfield Infrastructure Partners, the Canadian equity fund, owns the remaining 25 percent limited partnership interest in the Cove Point business.

Berkshire Hathaway Energy holds the Cove Point stake in the BHE Gas Transmission and Storage (BHE GT&S) unit, an interstate natural gas transmission and storage company headquartered in Richmond, Virginia and with operations in 10 states.

Dominion valuation

Dominion said its own total transaction value was in fact $3.5Bln inclusive of transaction proceeds of $3.3Bln and expected proceeds from the termination of related interest rate derivatives of $200 million.

“Since 2002, Cove Point has been an excellent service provider to its international and domestic customers - linking global gas supplies with American customers, and American gas supplies with customers around the world,” said Robert M. Blue, Dominion President and Chief Executive.

“However, this investment is non-core to Dominion Energy as we focus on our state-regulated utility operations,” CEO Blue added.

“The sale demonstrates our commitment to the company's credit profile and represents an attractive exit from what has been an excellent investment for our shareholders,” Blue stated.

Cove Point produces around 5.2 million tonnes per annum from a single Train and has tolling agreements with Gas Authority of India and Sumitomo Corp. and Tokyo Gas of Japan.

Earlier deal

Buffett's company agreed to acquire its initial Cove Point stake in July 2020. That deal between Dominion and Berkshire Hathaway was valued at $9.7Bln and included gas transmission and gas storage assets as well as the Cove Point stake. It also gave the Buffett company operatorship of the LNG export plant.

Buffett's company said at the time it was acquiring the Cove Point plant as it was one of only a limited number of such LNG export facilities in the US.

When agreeing to buy the Cove Point stake in July 2020 Buffett was also concluding his first big acquisition since 2015 and it happened to be in the natural gas and LNG business.

Buffett's BHE GT&S currently operates around 5,500 miles of transmission lines in the eastern US and 756 billion cubic feet of total natural gas storage, with 420 Bcf of working gas capacity. 

BHE GT&S also provides LNG solutions through another of its units called Pivotal LNG and other processing and storage ventures.

Warren Buffett, the Chief Executive and Chairman of Berkshire Hathaway and America’s best-known investor, said his group did not intend to acquire more shares in Occidental Petroleum nor try and take it over while it also sold billions-worth of shares in LNG operator Chevron Corp. and dumped more US bank stocks.

US investor Warren Buffett, whose Berkshire Hathaway group has a stake in the Cove Point LNG export plant in Maryland and a growing stake in US exploration and production company, Occidental Petroleum, revealed that he had stakes in Japan’s five main trading houses with their widespread energy assets and intended to buy more Japanese shares.

Jan 5 (LNGJ) - Occidental Petroleum Corp., whose main shareholders include US investor Warren Buffett, said it had paid off debts after also completing a $3 billion share repurchase program. “During fiscal year 2022, Occidental repaid over $10.5 billion of debt, including over $1.1Bln in the fourth quarter, reducing the face value of its debt to below $18Bln,” said the company.

Occidental added that the December winter storm in the US affected production. “While normal operations have resumed, average Permian Basin and Rockies production in the fourth quarter is expected to be impacted by a combined 10,000 barrels equivalent per day. Occidental also holds stakes in Algerian oil and natural gas fields.

Warren Buffett, one of America’s most followed investors, has taken his stake in Occidental Petroleum to more than 19 percent, in a varied portfolio of energy shares and stakes acquired by the man known as the “Oracle of Omaha”.

Blackstone Inc., a private equity fund based in New York, has purchased a 49 percent stake in the US Elba Island LNG export plant in Georgia where Shell is the only customers.

Dominion Energy, a shareholder in the Cove Point LNG export plant in Maryland supplying Asia and Europe, has closed the sale of Questar Pipelines to Southwest Gas Holdings Inc. in a transaction valued at almost $2 billion, including the assumption of $430M of existing debt.

Southwest Gas Holdings Inc. is rejecting continued attempts by activist investor Carl Icahn to buy up outstanding stock for $75 per share, calling the move opportunistic and not in the best interest of shareholders.