(Reuters) - Consolidated Edison Inc (ED.N) said its unit would purchase a 50 percent stake in a new entity that will hold Crestwood Equity Partners LP's (CEQP.N) natural gas pipeline and storage business for $975 million.
The joint venture will own natural gas pipelines and storage facilities that provide a critical link between natural gas fields and Northeast U.S. markets.
The new entity, Stagecoach Gas Services LLC, will have an implied market value of about $2 billion, the companies said in a statement.
The transaction is expected to be substantially completed in the second quarter, they said.
"We are very pleased to enter into a strategic partnership with Con Edison to own and expand these important pipeline and storage assets as local supply sources are developed to meet the growing demand for natural gas in the Northeast markets," Robert Phillips, chief executive of Crestwood's general partner, said.
Stagecoach Gas Services, which will be managed by Crestwood, will own four natural gas storage facilities with a combined storage capacity of about 41 billions of cubic feet equivalent,and three natural gas pipelines with a combined throughput capacity of 2,960 millions of cubic feet equivalent per day.
Barclays was Con Edison's financial adviser and Latham and Watkins LLP its legal adviser. Morgan Stanley was Crestwood's financial adviser and Husch Blackwell LLP its legal counsel.
Reporting by Swetha Gopinath and Vishaka George in Bengaluru; Editing by Anil D'Silva and Maju Samuel