DTE Energy to purchase natural gas midstream assets
DTE Energy will purchase midstream natural gas assets in support of the company's strategy to continue to grow and earn competitive returns for shareholders.
The agreement calls for DTE to purchase 100% of Appalachia Gathering System (AGS), located in Pennsylvania and West Virginia, and 40% of Stonewall Gas Gathering (SGG), in West Virginia, from M3 Midstream. In addition, DTE will purchase 15% of SGG from Vega Energy Partners. The combined purchase price for the assets to be acquired by DTE is $1.3 B. These assets will become part of the DTE's non-utility gas storage and pipeline business, which currently owns and manages a network of natural gas gathering, transmission and storage facilities serving the Midwest, Ontario and Northeast markets.
These assets gather natural gas produced in the Appalachia region and provide access to multiple markets, including the Great Lakes region, through interconnections with Columbia Gas Transmission, Texas Eastern Transmission and the NEXUS Gas Transmission project currently being developed by DTE and Spectra Energy. Demand for natural gas in the Great Lakes region is expected to increase significantly, driven by coal to gas conversions for electricity generation and economic growth. The low-cost natural gas supply from the Marcellus/Uticaregion is expected to serve this growth and displace higher cost alternatives.
These transactions, expected to be completed in Q4 2016, will not materially change DTE's current business mix.
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