Berkshire Hathaway Expands Its Energy Business
Berkshire Hathaway to Acquire Nearly $ 10 Billion in Assets from Dominion Energy in First Deal Since Coronavirus Recession.
4 billion will go to the account of the energy company, and the rest will go to pay off the debt of Dominion Energy.
Investors have long been interested in whether the fund will Warren Buffett look for new investment projects in the current economic environment, especially after the May announcement that Berkshire Hathaway has $ 137 billion on its balance sheet.
For Dominion, the deal is one of the milestones in its clean energy program. The company, headquartered in Richmond, Virginia, is one of the largest energy producers and transporters in the United States, providing electricity and natural gas to 7 million customers in 20 states.
«We plan to achieve zero carbon and methane emissions by 2050. The company also has one of the largest investment programs in the country for the production and storage of zero-carbon electricity.», – said the CEO of Dominion Thomas Farrell.
«Over the next 15 years, we plan to invest up to $ 55 billion in emission reduction technologies, energy storage, as well as replacement of gas distribution lines and renewable natural gas.».
Last week, Dominion Energy and Duke energy announced about cancellation of the project Atlantic Coast, a natural gas pipeline originally announced in 2014 that was supposed to stretch hundreds of miles. The parties stated that despite the recent approval of the project by the US Supreme Court, continued delays, litigation and anticipated cost increases have questioned the project’s economic viability.
In addition, the pipeline has faced intense criticism and legal challenges from environmental activists and other community groups..
«This is exciting news for West Virginia, Virginia, and North Carolina residents who deserve clean air, safe water, and protection from climate change.», – said in a statement by the Natural Resources Defense Council’s lawyer Gillian Giannetti. «As they abandon this dirty pipe, Dominion Energy and Duke Energy must now look towards energy efficiency investments using wind and solar to provide new jobs and a better future for all», – she added.
The deal will expand Berkshire Hathaway’s existing energy business by adding more than 7,700 miles of natural gas storage and pipelines, as well as about 900 billion cubic feet of gas storage.. The company currently provides services to more than 12 million electricity and natural gas consumers around the world..
Berkshire Hathaway agreed to provide «significant protection» for existing Dominion employees and adhere to existing union commitments, Farrell said.
As part of the deal, Berkshire will acquire full ownership of Dominion Energy Transmission, Questar Pipeline and Carolina Gas Transmission, as well as a 50% operating stake in Iroquois Gas Transmission System and a 25% operating stake in liquid natural gas shipping facility Cove Point..
The deal is expected to close in the fourth quarter of this year after regulatory approval.
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