Dominion sells interest in Md. LNG facility for $3.5B

Dominion Energy Inc. has sold its remaining interest in the Cove Point natural gas liquefaction facility in Maryland to Berkshire Hathaway Energy for $3.5 billion, the Richmond-based Fortune 500 utility announced Monday.

Dominion will clear about $200 million from the sale, according to a company news release. Total after-tax proceeds of about $3.3 billion will be used to repay debt, including a $2.3 billion loan secured by Dominion’s noncontrolling interest in Cove Point. Dominion shares closed at $51.76 Monday, down from $53.50 in after-hours trading on Friday, July 7.

The utility had sold Berkshire Hathaway Energy a 25% operating stake in Cove Point in 2020, as part of an $8 billion deal to sell the majority of Dominion’s gas transmission and storage assets to Berkshire. Dominion made the move in 2020 after abandoning its plans to build a controversial 600-mile, $8 billion-plus natural gas pipeline.

“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 Dominion Energy’s chair, president and CEO, Robert M. Blue.

“However, this investment is non-core to Dominion Energy as we focus on our state-regulated utility operations,” Blue continued. “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. With this sale, we have recycled $8.9 billion of cash flow, including dividends from Cove Point, since 2018 — well in excess of our total investment in the facility inclusive of the export project construction cost of approximately $4.1 billion. Further, this sale gives us the opportunity to reduce variable rate debt consistent with our goal of strengthening our balance sheet.”

McGuireWoods LLP provided legal counsel to Dominion, and the company’s financial advisers on the transaction were Mizuho Securities and RBC Capital Markets. The sale is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act and a filing with the U.S. Department of Energy.

Employing more than 16,000 workers across 16 states, Dominion has about 7 million customers nationwide, including 2.4 million Virginians. Dominion reported $3.5 billion in operating earnings for 2022, up from $3.2 billion in 2021.