Centerpoint Energy Inc. (CNP:US) agreed to form a master limited partnership with a jointly owned subsidiary of OGE Energy Corp. (OGE:US) and ArcLight Capital Partners LLC, combining pipeline and storage assets in Oklahoma, Texas, Arkansas and Louisiana.
Centerpoint, a Houston-based utility owner, and OGE Energy, an Oklahoma City-based utility owner, plan an initial public offering of equity in the partnership after the transaction closes, which is expected in the second or third quarter of 2013, according to a statement.
Centerpoint will have a 59 percent interest in the partnership, OGE Energy will have a 28 percent interest and ArcLight, a private equity investor, will hold a 13 percent interest, the companies said today in a joint statement. Centerpoint will hold a 40 percent interest and OGE Energy will have a 60 percent interest in distribution payments made by the new company to the general partner.
“We are very excited about creating a substantial, growth- oriented midstream company,” David M. McClanahan, president and chief executive officer of Centerpoint, said in a statement.
Centerpoint said last month it was exploring forming a partnership of its midstream assets, located near gas-rich shale formations, as a way to fund additional growth. The new partnership will own 8,400 miles of interstate pipelines, 2,300 miles of intrastate pipelines and have more than 11,000 miles of gathering lines.
To contact the reporter on this story: Mark Chediak in San Francisco at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Warren at email@example.com