Berkshire Hathaway takes stake in big CT natural gas pipeline - CT Insider

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With Berkshire Hathaway’s $9.7 billion planned acquisition of Dominion Energy’s natural gas transmission business, a major pipeline in western Connecticut will be getting a new stakeholder amid continuing investment in the system.

If approved by regulators, the deal would give Berkshire Hathaway some 7,700 miles of transmission lines, along with storage facilities and a minority share in a liquefied natural gas export terminal in Maryland of which it will assume operation. It is one of just six such LNG export facilities in the United States.

The transaction includes a 50 percent stake in the Iroquois Gas Transmission System which runs nearly 50 miles through western Connecticut, connecting with a pipeline crossing Long Island Sound. The other major owner is TC Energy, known until last year as TransCanada, which led the design and construction of the pipeline three decades ago.

The Iroquois Gas pipeline route traverses New York from Waddington on the St. Lawrence River, entering Connecticut in Sherman and passing through portions of New Milford, Brookfield, Newtown, Monroe, Shelton, Stratford and Milford. At a Brookfield compressor station, the Iroquois pipeline bisects Enbridge’s Algonquin Gas Transmission system that runs east to the Rhode Island border.

Comprised of gaseous methane, natural gas is funneled from underground wells via “gathering” pipelines to centralized processing stations, where gas is fed into transmission pipelines. Those pipelines span 20 inches to 42 inches in diameter, running underground about 70 miles to intermittent compressor stations that use turbines to pressurize the gas anew as it is forced through to customers and end points.

Iroquois is seeking permission from the Federal Energy Regulatory Commission to add a new building at its Brookfield facility that would house a pair of turbines to compress gas further, allowing it to increase gas capacity in its Connecticut system rather than adding an expensive new pipeline. It also plans to add equipment in Milford to cool gas as temperatures increase as part of the compression process.

More than a third of households

Power plants fired by natural gas produced half of Connecticut’s electricity as of March, according to the most recent estimates from the Energy Information Administration, with NTE planning to add to that predominance in seeking permission to build a $500 million natural gas plant in Killingly.

Dominion’s Millstone Power Station nuclear plant in Watertown produces most of Connecticut’s remaining electricity load, with the state aiming to increase its renewable generation capacity through offshore wind farms in the early stages of planning.

About 35 percent of Connecticut households use natural gas, EIA data shows, with retail suppliers including Connecticut Natural Gas and Southern Connecticut Gas, both owned by Avangrid; and Eversource Energy. Combined, the three companies had more than 600,000 Connecticut customers, according to the Public Utilities Regulatory Authority, with several alternative suppliers also registered with PURA to bill for natural gas on a retail basis.

Berkshire Hathaway’s existing Connecticut holdings include the Wallingford-based real estate agency Berkshire Hathaway HomeServices New England Properties, as well as General Reinsurance and another reinsurance division based in Stamford; Duracell which has its main research facility in Bethel; and H.H. Brown Shoe based in Greenwich. Other household names pepper Berkshire Hathaway’s list of operating companies including Benjamin Moore, Fruit of the Loom, Geico and Oriental Trading.

Berkshire Hathaway Energy is based in Des Moines, Iowa, and has one natural gas facility in the Northeast in the Saranac power plant in Plattsburgh, N.Y.

Dominion CEO Tom Farrell did not hint at any deal in the works during a May conference call, with the company having acquired the pipelines in a merger 20 years ago with Consolidated Natural Gas.

The Dominion deal comes a week after Oklahoma City-based Chesapeake Energy declared bankruptcy, with $11.8 billion in debt against assets of $16.2 billion and coming off an $8.3 billion loss in the first three months of this year that left it with $82 million in cash entering April.

Chesapeake Energy is credited as a pioneer in the process of hydraulic fracturing or fracking, a process by which a sandy slurry is pumped into underground wells to fracture the walls and tease out additional oil or gas. Last week, Covia filed for bankruptcy as well, with the company created in the 2016 merger of an Ohio company with Unimin, based at the time in New Canaan.

Includes prior reporting by Luther Turmelle.

Alex.Soule@scni.com; 203-842-2545; @casoulman

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