UGI purchases Mountaineer Gas Co. as it expands reach
KING OF PRUSSIA, Pa. — UGI Corp. has reached an agreement for the acquisition of the Mountaineer Gas Co., the largest gas distribution company in West Virginia.
The deal with Mountaintop Energy Holdings LLC, the owners of Mountaineer Gas, is worth $540 million and includes the assumption of approximately $140 million of debt.
“We are very pleased to announce this important transaction and expand our core utility operations in the mid-Atlantic region,” John L. Walsh, president and Chief Executive Officer of UGI, said.
The company plans to continue and expedite the replacement of more than 1,500 miles of bare-steel pipe and expand the reach of natural gas in West Virginia to unserved and underserved areas, he said.
“These investments will improve the safety and reliability of the distribution system and align with our environmental efforts to lower methane and other GHG emissions,” Walsh said. “We expect Mountaineer’s rate base to grow by a compound annual growth rate of approximately 10 percent to 12 percent over the long term.”
Mountaineer Gas “is a great fit for our natural gas businesses,” Robert F. Beard, executive vice president of Natural Gas of UGI, said.
“Like UGI Utilities, Mountaineer’s customers are situated in the prolific Marcellus shale production region and have access to clean, abundant, reliable and affordable natural gas,” Beard said. “We look forward to becoming a part of the West Virginia community and investing in the safety and reliability of the Mountaineer system, while maintaining competitive rates for our customers and building on an already strong history of excellent customer service.”
Mountaineer Gas serves about 215,000 customers in 50 of the state’s 55 counties. The customer base is approximately 90 percent residential, with the remaining 10 percent comprised of commercial and industrial customers. Mountaineer is fully regulated, and its system has nearly 6,000 miles of distribution, transmission, and gathering pipelines.
The transaction is subject to regulatory review and other closing conditions.
UGI, which held a live internet conference call on Tuesday to discuss the acquisition, distributes and markets energy products and services.