Warren Buffett ahead of Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska.
David A. Grogan | David A Grogan CNBC Money
Berkshire Hathaway Energy Corp said on Monday it agreed to buy a 50 percent stake in the Cove Point liquefied natural gas facility for $3.3 billion in cash.
Warren Buffett’s Big Energy and Utilities Sector dominion energy corp. Will now own a 75% limited partnership interest in Cove Point LNG located in Lusby, Maryland. A subsidiary of Brookfield Infrastructure Partners holds the remaining 25 percent.
While the deal is modest for Berkshire, it builds on the conglomerate’s growing bet on energy infrastructure as it secures the functionality of rare U.S. exportable liquefied natural gas Control of one of the facilities.
“It builds on the long-term theme of energy resources becoming more valuable and one of the few U.S. exporters of liquefied natural gas,” said Bill Stone, chief investment officer at Glenview Trust and a Berkshire shareholder. over the ownership of the
The Cove Point LNG terminal has a storage capacity of 14.6 billion cubic feet and an output capacity of 1.8 billion cubic feet per day. The company has a long-term contract with Japanese trading firm Sumitomo Corporation, which Buffett also invested in.
Berkshire Hathaway first bought a stake in Dominion’s natural gas pipeline and storage assets in 2020 for $4 billion. Greg Abel, chairman and former CEO of Berkshire Hathaway Energy, previously told CNBC that the 2020 deal was brokered through his strong relationship with former CEO Tom. Farrell.
Abel is currently the vice chairman of Berkshire Hathaway’s non-insurance business and the successor to the 92-year-old “Oracle of Omaha.” Buffett said Abel has assumed many responsibilities for the group.
In 2022, Berkshire is proposing to spend nearly $4 billion to help Iowa generate more wind and solar power. Meanwhile, the group has been significantly increasing its investments in two traditional energy companies, Occidental Petroleum Corp. and Chevron Corp.
“Buffett has long liked pipelines because their revenue is toll bridged rather than pure commodity exposure, which is probably similar,” Stone said. Businesses have signed long-term take-or-pay contracts.”
Natural gas futures have fallen more than 40% this year to $2.709 per million British thermal units.