Southern Company bought a 50 percent stake in Kinder Morgan Inc.’s Southern Natural Gas (NG) pipeline system in the latest expansion into gas shipping by a power generator amid slipping electricity demand.
Kinder Morgan will continue to operate the 7,600-mile (12,000 kilometer) system that connects gas fields across the US Gulf Coast and Gulf of Mexico to markets in the Deep South including some where Southern operates, the companies said in a recent joint statement.
Southern’s stake has an implied value of USD $1.47 billion, based on a debt-inclusive total enterprise value of about USD $4.15 billion for the pipeline system, according to the statement. The second-largest US utility by customers said it expects to finance its purchase in “a credit-supportive manner.”