CorEnergy Infrastructure Trust Inc. (NYSE: CORR) announced Nov. 17 it entered into a definitive agreement to purchase the ownership and operations of the MoGas Pipeline System from MoGas Pipeline LLC for $125 million in cash.
The 263-mile pipeline supplies natural gas in and around the St. Louis region and to small municipalities in central Missouri.
CorEnergy, based in Kansas City, Mo., expects to finance the acquisition with a combination of borrowings under its credit facility and with proceeds of its simultaneously announced public offering of common stock.
The MoGas Pipeline System originates in northeast Missouri and extends into western Illinois and central Missouri. The pipeline has receipt points with Mississippi River Transmission Corp. in eastern St. Louis and with Panhandle Eastern Pipe Line Co. and Rockies Express Pipeline on the system’s northern end.
Major customers are Laclede Gas Co. (NYSE: LG) and Ameren Missouri, which both serve the St. Louis area with local gas distribution services, and Omega Pipeline serving Ft. Leonard Wood in central Missouri. Omega Pipeline is a wholly owned subsidiary of CorEnergy. Transportation agreements are governed by FERC-approved natural gas tariffs.
The transaction is expected to close in late November. BofA Merrill Lynch is exclusive structuring adviser to CorEnergy.
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