Dominion Energy is making plans to buy out its midstream partnership, duplicating an effort this year by U.S. competitors to avoid an extra tax burden.

The Richmond, VA-based operator has made an offer to acquire by early next year the remaining stakes in its master limited partnership (MLP), Dominion Energy Midstream Partners (DM), for about $17.75/unit, an 8.2% premium to the 30-day volume-weighted average unit price.

The action follows FERC’s decision in March to no longer allow MLP interstate natural gas and oil pipelines to recover income tax allowances in cost of service rates. Since the ruling, simplified structures to eliminate MLPs have been launched by Enbridge Inc., Williams, Energy Transfer Partners LP and Loews Corp.

“Continued weakness in MLP capital markets combined with the prolonged disruption in DM’s common unit price since the March 15 Federal Energy Regulatory Commission policy revision were key factors that led to this decision,” Said Dominion CEO Tom Farrell. “Fortunately, Dominion Energy has already successfully completed several steps that will allow us to achieve our earnings and credit objectives despite these challenges.

“The proposed transaction would provide a premium to recent market trading levels for DM common unitholders and also benefit Dominion Energy shareholders by removing uncertainty as to the future of DM and the potentially negative impact of changes in FERC tax policy to the future cash flows of current DM assets.”

The partnership holds a portfolio of natural gas terminaling, processing, storage, transportation and related assets. Dominion already has a nearly 47.5% stake in the MLP.

Dominion’s offer to take over the midstream unit already has been approved by the board and is nonbinding. The proposed transaction, if completed, would be subject to customary closing conditions.

In related news, Legacy Reserves Inc. and Legacy Reserves LP said Thursday they completed a reorganization, transitioning the Midland, TX-based exploration and production company into a corporation from an MLP. Legacy is scheduled to ring the Nasdaq Stock Market opening bell on Friday, marking the beginning of Legacy shares trading on the Nasdaq Global Select Market under the symbol “LGCY.”