Veresen to acquire GIP’s 50% stake in Ruby pipeline for $1.42bn

Veresen has agreed to acquire 50% convertible preferred interest in the Ruby pipeline system from Global Infrastructure Partners (GIP) for $1.425bn.

Kinder Morgan’s affiliate El Paso Pipeline Partners owns the remaining 50% stake of Ruby and will continue to operate the 680-mile, 42in pipeline.

The pipeline starts at the Opal hub in Wyoming and extends to the Malin hub in Oregon.

It has a current capacity to carry approximately 1.5 billion cubic feet per day , with potential to be expanded to 2 billion cubic feet per day via the addition of compression.

The Ruby pipeline will connect to another planned pipeline, 50% of which is owned by Veresen, running to the site of the proposed Jordan Cove liquefied natural gas terminal.

The transaction, which is subject to regulatory approval, is expected to be completed in the fourth quarter of 2014.

Veresen president and CEO Don Althoff said: "This is a rare opportunity to acquire a large interest in a core US pipeline asset.

"Ruby is an ideal fit for Veresen because it offers immediate long-term contracted cash flows with downside protection through the preferred interest structure and provides significant future added upside related to our Jordan Cove LNG project."

Veresen owns and operates energy infrastructure assets throughout North America.

The company is working on the Jordan Cove LNG terminal, a six million tonne per annum natural gas liquefaction facility proposed to be built in Coos Bay, Oregon.

Veresen is also developing the Pacific Connector gas pipeline, a 234-mile natural gas transmission system proposed to start in Malin, Oregon, and terminate at the Jordan Cove LNG terminal.

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Image: Map of Ruby pipeline system. Photo: courtesy of CNW Group / Veresen.