NextEra Energy Partners announced that it has completed the previously announced acquisition of NET Midstream, a privately held developer, owner and operator of a portfolio of seven long-term contracted natural gas pipeline assets located in Texas. NextEra Energy Partners also announced the completion of the acquisition of the 149-megawatt (MW) Jericho Wind Energy Center in Ontario, Canada, from a subsidiary of its sponsor, NextEra Energy Resources. In addition, the partnership has closed US$600 million of term loans, which completes its financing for the NET Midstream and Jericho acquisitions.
The seven natural gas pipelines in the portfolio are all strategically located, serving power producers and municipalities in South Texas, processing plants and producers in the Eagle Ford Shale, and residential, commercial and industrial customers in the Houston area. The NET Mexico Pipeline, the largest pipeline in the portfolio, provides a critical source of natural gas transportation for low-cost, US-sourced shale gas to Mexico under a 20-year ship-or-pay contract with a BBB+-rated, wholly owned subsidiary of Pemex Gas y Petroquimica Basica, a division of PEMEX, the Mexican state-owned oil and gas company. The NET Mexico Pipeline is 10% owned by a PEMEX subsidiary. The combined acquisition portfolio includes 3.0 billion cubic feet (Bcf) per day of ship-or-pay contracts, with on average investment-grade counterparty credit and long-term contracted assets with a 16-year average contract life. The three largest pipelines in the portfolio have planned growth and expansion projects that, if completed, are expected to provide approximately 1.0 Bcf/d of additional contracted volumes.
NextEra Energy Partners acquired NET Midstream for a total transaction value of approximately $2.1 billion.
In addition, NextEra Energy Partners acquired the 149-MW Jericho Wind Energy Center from its sponsor, NextEra Energy Resources, for a total purchase price of approximately $210 million in cash consideration, plus approximately $19 million in working capital (subject to post-closing adjustments), and assumed approximately $294 million in existing debt. The addition of the Jericho Wind Energy Center in Ontario, Canada, increases NextEra Energy Partners' renewables portfolio to more than 2072 MW.
Image from NextEra Energy Partners.