Dominion Midstream Partners LP (NYSE: DM) has closed its acquisition of a 25.93% ownership interest in Iroquois Gas Transmission System LP. Dominion Midstream issued approximately 8.6 million common units to affiliates of National Grid plc and New Jersey Resources Corp. to acquire their ownership interests in Iroquois.
Approximately 6.8 million units were issued to National Grid, and approximately 1.8 million units were issued to New Jersey Resources. National Grid and New Jersey Resources have agreed to certain transfer restrictions applicable to such units including, with certain exceptions, a general one-year lockup period, and have been granted certain registration rights and piggyback registration rights with respect to future Dominion Midstream equity offerings. No public market issuance of units was made in connection with these transactions.
Iroquois Gas Transmission System LP, is a Delaware limited partnership that owns and operates a 416-mile, FERC-regulated natural gas transmission pipeline extending from the Canada-US border near Waddington, New York, through New York and Connecticut to South Commack, New Yorki, on Long Island and Hunts Point, New York, in the Bronx.
The ownership stake in Iroquois is expected to contribute about $20 million annually in cash flows to Dominion Midstream. The partnership expects that those cash flows and cash flows associated with Dominion Midstream's existing preferred equity interest in Cove Point and ownership of Dominion Carolina Gas Transmission will be sufficient to support annual cash distribution growth at Dominion Midstream at the targeted rate of 22% through 2016.
Dominion Midstream has no plans to acquire the 24.72% ownership interest in Iroquois currently held by Dominion Gas Holdings LLC, a wholly owned subsidiary of Dominion Resources.