Crestwood To Form JV With Consolidated Edison; Updates 2016 Outlook

(RTTNews) - Consolidated Edison, Inc. (ED) and Crestwood Equity Partners LP (CEQP) announced Thursday that their subsidiaries entered into definitive agreements to form a joint venture to own and develop Crestwood's existing natural gas pipeline and storage business located in northern Pennsylvania and southern New York.

These premier natural gas pipelines and storage facilities provide a critical link between robust natural gas supply sources and Northeast US demand markets, the companies said.

Subject to customary closing conditions and purchase price adjustments, Crestwood will contribute its existing natural gas pipeline and storage business to a new entity, Stagecoach Gas Services LLC, and a subsidiary of Con Edison Transmission, Inc. will purchase a 50 percent equity interest in Stagecoach Gas Services for approximately $975 million, with an implied market value of almost $2 billion.

Con Edison intends to finance the transaction with a combination of debt and new equity that is consistent with its capital structure. The transaction is expected to be substantially completed in the second quarter of 2016.

Stagecoach Gas Services will be managed by Crestwood and operated by a newly formed services company. It will own four natural gas storage facilities.

Crestwood also provided an update on its 2016 strategic plan, declaring its first quarter 2016 distribution, and updating its 2016 outlook.

The board of directors of Crestwood's general partner has declared the partnership's quarterly cash distribution of $0.60 per limited partner unit for the quarter ended March 31, a reduction of approximately 56% from the fourth quarter 2015 distribution.

For fiscal 2016, the company now expects total adjusted EBITDA, a key earnings metric, of $435 million to $465 million.