CenterPoint Energy to Sell Natural Gas Retail Business for $400m

CNP said that it will use the net proceeds from the sale to clear its debt.

SEATTLE (Oil Monster): CenterPoint Energy (CNP) has signed an agreement to sell its natural gas retail business to private equity firm Energy Capital Partners (ECP) in a deal valued at around $400m.

CenterPoint Energy Services (CES) provides natural gas sales, storage and supply, as well as other energy-related services. It has approximately 30,000 commercial and industrial customers, utilities and municipalities across more than 30 US states.

CES will sign a structured long-term preferred supply agreement, under which oil and gas firm Shell’s North American unit will provide gas supply and collateral support.

CNP said that it will use the net proceeds from the sale to clear its debt.

According to CNP, the divestment of its retail business will improve its core electric and natural gas utility operations

CenterPoint Energy interim president and CEO John Somerhalder II said: “When combined with our recent agreement to sell Miller Pipeline and Minnesota Limited, two businesses that comprised our infrastructure services segment, we expect our utility earnings contribution to approach 90% over the next several years.”

The parties involved expect to complete the deal by the second quarter of this year. The deal is subject to customary closing conditions and the termination or expiration of the Hart-Scott-Rodino (HSR) waiting period.

ECP partner Andrew Gilbert said: “ECP looks forward to partnering with CES and its employees in order to continue providing customers with best-in-class service and reliable gas supply.”

CNP has appointed Goldman Sachs as its exclusive financial advisor while Akin Gump Strauss Hauer & Feld serves as its legal counsel.

Courtesy: www.hydrocarbons-technology.com