DTE Energy to acquire natural gas midstream assets for $1.3bn

US-based DTE Energy is planning to acquire midstream natural gas assets as part of its growth strategy, as well as earn viable returns for shareholders.

As part of its strategy, DTE will buy 100% of Appalachia Gathering System (AGS) located in Pennsylvania and West Virginia, and 40% of Stonewall Gas Gathering (SGG) in West Virginia from US-based midstream energy company M3 Midstream.

DTE is also planning to acquire 15% SGG from Houston-based midstream energy firm Vega Energy Partners. DTE will be purchasing all the midstream natural gas assets for $1.3bn.

DTE Energy CEO Gerry Anderson said: "These transactions will significantly increase our midstream presence in the Appalachian basin.

“The acquired assets are in a productive area of the Southwest Marcellus / Utica region and have expansion potential.

"These acquisitions align with DTE's existing strengths in managing natural gas midstream assets.”

The midstream natural gas assets will become part of DTE’s non-utility Gas Storage and Pipeline business, which presently owns and manages a network of natural gas and serves the mid-west, Ontario and north-east markets.

The assets that DTE is planning to acquire will serve as a platform for collecting the natural gas produced in the Appalachia region and provides access to different markets, including the Great Lakes region, through interconnections with Columbia Gas Transmission.

They will also establish a link with the Texas Eastern Transmission and the NEXUS Gas Transmission project, which is currently being developed by DTE and Spectra Energy.

DTE Energy president and COO Jerry Norcia said: “The decision to purchase these assets is consistent with DTE's growth plans.

“These two systems are complementary to our current asset portfolio and will provide synergies over time.”

The transactions are expected to be completed in the fourth quarter of this year.