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Berkshire Hathaway takes over operatorship of Cove Point Liquefaction in US

Highlights

Dominion sells terminal stake, midstream assets

Company to focus on regulated utility businesses

Houston — Warren Buffett's Berkshire Hathaway became the operator of the Cove Point Liquefaction terminal in Maryland Nov. 2 after it completed its acquisition of a majority of Dominion Energy's natural gas midstream infrastructure and took a stake in the export facility.

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Dominion's sale of Questar Pipeline and related assets to Berkshire Hathaway remains pending, with a closing date target in early 2021.

The changeover in operator at Cove Point comes at a critical moment for US LNG exporters, with total utilization at all-time highs on stronger netbacks from key end-user markets.

In July, Berkshire Hathaway agreed to buy substantially all of Dominion's gas pipeline and storage assets for $4 billion in cash and the assumption of $5.7 billion in debt. As part of the deal, Berkshire Hathaway is now the operator and holds a 25% stake in Cove Point, an important outlet for US gas to Europe and beyond with a capacity of about 5.25 million mt/year. Dominion retains a 50% passive ownership.

At the time the deal was announced, Dominion said the transaction was expected to close during the fourth quarter, which would be by the end of this year. On Sept. 30, however, it said the sale of most of the assets would be completed around the beginning of November, but the sale of assets tied to Questar and Overthrust pipelines would not be completed until early 2021, pending clearance from the Federal Trade Commission. The company said that process was taking longer than originally planned.

Dominion is shifting its focus back to its core regulated utility businesses, while Berkshire Hathaway is making a bigger bet on gas midstream and LNG. At the time it announced the gas midstream asset sales, Dominion also canceled its $8 billion Atlantic Coast Pipeline project that it was building with Duke Energy.

The massive pipeline project, which would have boosted gas takeaway capacity from the Appalachian Basin in the US Northeast to downstream customers, had faced ballooning costs and legal hurdles because of opposition from environmental groups.