Following its plan to add utility assets, Rapid City, SD-based Black Hills Corp. said Thursday it has agreed to acquire the natural gas transmission pipeline and distribution utility assets of Anadarko Petroleum Corp.'s utility pipeline operator, MGTC Inc., in Wyoming where Black Hills has existing combination utility operations.
The acquisition requires approval of the Wyoming Public Service Commission and is expected to close by the end of 2014.
Black Hills said it has agreed to pay $6 million for the Gillette, WY-based company's 400 miles of transmission and distribution utility pipelines serving the northeastern part of the state, where MGTC serves about 400 customers with an annual throughput of 2.8 Bcf.
In recent years, Black Hills has acquired more utility assets as it has shed merchant generation and some oil/gas units (see Daily GPI, Feb. 7, 2012; July 18, 2008). In 2008, it began adding to its utility holdings with the acquisition of Aquila Inc.'s electric utility in Colorado and Aquila's four natural gas utilities in Colorado, Iowa, Kansas and Nebraska.
"This acquisition demonstrates our continuing strategy to grow our customer base through acquiring small utilities near our existing operations," said CEO David Emery.
Black Hills will operate the assets as a separate division of its Cheyenne Light, Fuel & Power, the holding company's combination utility in Cheyenne. It will be part of Black Hills Energy.
Emery said that the newly constituted utility will offer Wyoming MGTC customers enhanced services, including electronic payment options and levelized billing programs. During the past year, Black Hills has acquired several small utility systems in Kansas and elsewhere, Emery said.