Blackstone Energy Partners will acquire a 32pc interest in Energy Transfer Partners' (ETP) Rover natural gas pipeline project.
ETP is building the 3.25 Bcf/d (92mn m³/d) Rover pipeline in Appalachia and will be the operator of the line once it is in service. Under the terms of the deal, Blackstone will acquire a 49.9pc interest in a unit of ETP, ET Rover Pipeline, $1.57bn, which will result in Blackstone owning more than a third of interest in Rover. ET Rover owns a 65pc interest in the line.
Rover will transport gas from the Marcellus and Utica shale production areas to the Dawn Hub in Ontario, Canada.
The line has experienced delays and regulatory setbacks during construction as a result of drilling fluid spills, soil erosion, the unauthorized destruction of historic property and public opposition. Most recently, two members of the Congress filed with FERC requesting an expanded investigation on reports of seven industrial spills from Rover construction, saying that some estimates of the April drilling fluid spill placed the amount as high as 5mn USG.
The Blackstone investment will reimburse ETP for its share of Rover construction costs incurred by the closing date as well as some future construction costs. ETP said it plans to use the proceeds to pay down debt and help fund current growth projects. The transaction is expected to close in the fourth quarter.
The pipeline has delayed its phase one startup from July to "late summer" and is scheduled to begin full flows in November.
