Duke to sell some shares of Atlantic Coast Pipeline project after Piedmont deal

Dive Brief:

Duke Energy confirmed to Charlotte Business News that it will sell a portion of its interest in Atlantic Coast Pipeline to project developer Dominion, related to the $4.9 billion acquisition of Piedmont.
Duke owned 40% of the project and Piedmont owned 10%, but ownership clauses stated that no party could own a majority stake in the pipeline.
Duke on Monday completed its acquisition of Piedmont Natural Gas, adding 1 million natural gas accounts to its customer base.

Dive Insight:

Last week, North Carolina regulators approved Duke Energy's acquisition of Piedmont, the final regulatory hurdle left to close the deal.

Though customers should see no change, Duke said that internally, the companies will be working to integrate Piedmont's corporate functions into Duke Energy's structure. The deal adds Piedmont's 1 million natural gas customers to Duke Energy's base of 525,000 natural gas customers and 7.4 million electric customers.

Duke President and CEO Lynn Good told Bloomberg last week that the deal will help accelerate the company's transition away from coal, though the timing remains uncertain. “I think we’ll still be operating coal in 2030,” Good said. “Whether we will be in 2040 I think is a question, or in 2050.”

Other deals taking place highlight the rush to invest in natural gas assets as a cleaner source of fuel. DTE invested $1.3 billion for midstream assets earlier this month, and other utility deals include Dominion's bid to buy Questar, ConEd's $975 million stake on a gas pipeline venture, and Southern Co's merger with AGL Resources.

Closing the deal means Duke will need to restructure its ownership of the Atlantic Coast Pipeline, on which Dominion is the leader of development. Piedmont had owned a portion, but Duke's acquisition means it would own too much. Under terms of the line's development, no party can own a majority share, and Dominion must remain the project lead.

According to Charlotte Business News, a Dominion spokesman said Duke will sell some of its shares, ensuring that Dominion will own 48% of ACP and Duke will own 47%.

Developers filed plans for the 564-mile ACP line last year, which aims to move natural gas supplies from West Virginia to North Carolina. The $5.1 billion system would have a capacity of 1.5 million dekatherms/day.