Duke Energy Acquires Piedmont in $4.9 Billion Deal, Growing its Foothold in U.S. Pipelines

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Researched by Industrial Info Resources (Sugar Land, Texas)--Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina) completed its acquisition of Piedmont Natural Gas Company (NYSE:PNY) (Charlotte) on Monday, closing out a long-anticipated transaction that could change the face of the region's Oil & Gas Pipeline Industry. The acquisition will add Piedmont's 1 million natural gas customers in North Carolina, South Carolina and Tennessee, to Duke Energy's 525,000 natural gas customers and 7.4 million electric customers. Industrial Info is tracking more than $6.2 billion in projects involving the two companies, half of which are in the three states.

Duke bought the natural gas company for $4.9 billion in cash and assumed $1.8 million in long-term debt, valuing the purchase at $6.7 billion, according to Greenville Online. Piedmont will retain its name and operate as a business unit of Duke Energy, according to a press release from Duke, which stressed that there will be no immediate changes in customer service.

Duke and Piedmont are part of a consortium headed by Dominion Resources Incorporated (NYSE:D) (Richmond, Virginia) that is building the Atlantic Coast Pipeline, a proposed, 600-mile transmission project that would bring natural gas from the Marcellus and Utica shale formations to Virginia and North Carolina. Industrial Info is tracking $1.31 billion in active projects related to the proposed project; for more information, including detailed project reports on its major components, see September 30, 2016, article - Dominion's Atlantic Coast Pipeline Signs Contractor for Multi-State Services.

Among Piedmont's proposed projects are a $20 million natural gas pipeline and its adjoining $18 million compressor station in Pelzer, South Carolina. The 1.5-mile, 20-inch-diameter pipeline would carry up to 75 million standard cubic feet per day of natural gas from the compressor station to Duke's W.S. Lee Power Station. The Pelzer station would include a 2,200-horsepower, engine-driven compressor gas package. For more information, see Industrial Info's project reports on the pipeline and compressor station.

Duke is now constructing a $750 million combined-cycle unit addition at the William S. Lee Power Station in Pelzer. The 750-megawatt (MW_, gas-fired unit would comprise two Siemens SGT6-5000F combustion turbine generators, each with a capacity of 250 MW; duct-fired heat recovery steam generators; and a 250-MW condensing reheat steam turbine generator. Construction is scheduled to be finished by late 2017. For more information, see Industrial Info's project report.

In North Carolina, Duke is proposing two major projects at one of the largest power stations in the state: a $600 million combined-cycle unit addition and a $192 million peaking unit addition at the Asheville Power Station in Arden, North Carolina. The 560-MW combined-cycle unit will comprise two 280-MW, 1-on-1 power blocks with General Electric's (NYSE:GE) dual-fueled combustion turbine generators, with a heat recovery steam generator and a GE (or equivalent) steam turbine generator; the 198-MW peaking unit will have a single such turbine. For more information, see Industrial Info's project reports on the proposed combined-cycle and peaking units.

"We look forward to welcoming Piedmont's employees and one million customers in the Carolinas and Tennessee to Duke Energy," said Lynn Good, the president and chief executive officer of Duke Energy, in the press release. "This combination provides us with a growing natural gas platform, benefitting our customers, communities and investors."

Last week, the North Carolina Utilities Commission approved the proposed acquisition, which was the final regulatory hurdle needed to close the transaction. Among Duke's offers to smooth the process was a commitment to $10 million in gas bill savings for North Carolina customers in the first two years, as well as more than $1 million in savings for South Carolina customers. The Tennessee Regulatory Authority and Piedmont's shareholders previously approved the transaction.

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