Summit to buy CenterPoint’s Arkansas and Oklahoma assets

Summit Utilities has agreed to acquire CenterPoint Energy’s gas distribution assets in the US states of Arkansas and Oklahoma for $2.15bn.

The assets considered for sale include 17,000 miles of gas main pipeline that run across Arkansas, Oklahoma and Texas.

CenterPoint’s Arkansas and Oklahoma gas distribution assets serve more than half a million customers.

CenterPoint president and CEO Dave Lesar said: “As outlined in our December 2020 Investor Day, our commitments include delivering annualised utility earnings per share growth of 6% to 8% and growing our rate base at a 10% compound annual growth rate.

“The ability to efficiently redeploy this capital and the eventual exit of the midstream investments will have no impact on our targeted 6% to 8% annualised earnings per share growth rate.”

Proceeds from the sale will be used by CenterPoint to recycle capital to fund its 10% compound annual growth rate.

CenterPoint is also considering eliminating the Oklahoma and Arkansas storm-related incremental natural gas cost from its balance sheet.

Lesar added: “This valuation represents a landmark multiple for the LDC space and is a clear testament of the premium utility assets in these two jurisdictions. These assets are a proven integral part of the energy supplies in the states in which they operate.”

The acquisition would allow Summit to expand its services in Arkansas and Oklahoma, where it began expansion with the purchase of Arkansas Oklahoma Gas Corporation in 2017.

Summit also expects the acquisition to provide it with additional scale and capacity to offer improved services to natural gas customers in the region.

The deal, subject to customary closing conditions and state regulatory approvals, is planned to be closed by the end of 2021.