Dynegy Inc. and MidAmerican Energy Holdings Co. announced late Friday they closed on the sale of Northern Natural Gas Co. to the Berkshire Hathaway company, extending a badly needed financial lifeline to Dynegy and rescuing it from the brink of bankruptcy. The two companies completed the deal following early clearance under the Hart-Scott-Rodino Act by the Federal Trade Commission, which was about two weeks sooner than expected.

Under the transaction, Des Moines, IA-based MidAmerican picked up Northern Natural for $928 million in cash and the assumption of $950 million in debt. It also acquired all of the common and preferred stock in the natural gas pipeline.

“Northern Natural Gas is an excellent addition to our growing interstate gas transmission business,” said MidAmerican Energy CEO David L. Sokol. “It provides a great complement to our Kern River Gas Transmission Co.,” which MidAmerican purchased from Williams Cos. in March for $960 million.

For Dynegy, “the completion of this asset sale is an important step in [the company’s] ongoing efforts to improve its financial profile,” said Dan Dienstbier, interim CEO of the Houston-based energy company.

Northern Natural is a 16,600-mile gas pipeline that extends from the Permian Basin in Texas to the upper Midwest, providing services to major utilities and industrial customers. It offers transportation and storage services to its customers, and cross-haul and grid transportation between other interstate and intrastate pipelines in the Permian, Anadarko, Hugoton and Midwest areas. The pipeline has storage capacity of 59 Bcf and market-area capacity of approximately 4.3 Bcf/d.

Dynegy has not owned the pipeline long. It acquired it earlier this year from Enron Corp. as part of a deal in a failed attempt last fall to rescue Enron from bankruptcy.

MidAmerican Energy Holdings has been on a spending spree since it was acquired by Warren Buffet’s Berkshire Hathaway two years ago. It is the corporate parent of MidAmerican Energy Co., a utility with 653,000 electric and 622,000 natural gas customers in Sioux Falls, SD, to the Quad-Cities areas of Iowa and Illinois.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.