Southern Co. has acquired a 50% equity interest in the Southern Natural Gas (SNG) pipeline system from Kinder Morgan Inc., which will continue to operate the system.
SNG is a 7,600-mile pipeline system connecting supply basins in Texas, Louisiana, Mississippi, Alabama, and the Gulf of Mexico to Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, and Tennessee. SNG is a principal transporter of gas to Alabama, Georgia, and South Carolina, which are part of one of the fastest-growing gas demand regions in the US, the companies said.
The agreement also commits the companies to cooperatively pursue specific growth opportunities to develop gas systems for the venture.
Inclusive of existing SNG debt, the transaction equates to an SNG total enterprise value of about $4.15 billion, implying a value of $1.47 billion for Southern Co.’s 50% share. The companies expect to complete the transaction in this year’s third quarter or early in the fourth quarter.