Energy Transfer Partners (ETP) announced it is selling approximately one-third (32.4 percent) of its interest in the continually troubled Rover Pipeline to Blackstone Energy Partners for $1.57 billion. This is the second sale of ETP interest in a pipeline, following the sale of 36.8 percent of the Bakken Pipeline to to MarEn Bakken Company, a joint venture between MPLX LP and Enbridge Energy Partners.
Blackstone’s energy-focused private-equity fund will pay $1.57 billion in cash for a 49.9% stake in ET Rover Pipeline LLC, which is a subsidiary of ETP and majority owner of the pipeline.
The $4.2 billion Rover Pipeline will transport 3.25 billion cubic feet of gas per day along a 713-mile pipeline from West Virginia, through Ohio and eventually to Canada.
The project has had a number of environmental problems during construction resulting in sanctions from environmental regulators in Ohio and West Virginia. Work on parts of the line has been halted while regulators investigate incidents of drilling fluid spills into local wetlands.
ETP also demolished a historic house in Ohio and was fined $4 million, and West Virginia officials have halted construction due to problems with improper erosion control and sediment deposit.
ETP continues to claim the company has not violated any rules and says the sale is not related to regulatory issues, according to ETP spokeswoman Vicki Granado.
The transaction is expected to close in the fourth quarter. ETP will then own 50.1 percent of the Rover pipeline.