Oil & Gas - Energy - Commodities - Resources (OILBRENT)

[Timothy Smith]

$CEQP - $ED Crestwood Equity Partners (NYSE:CEQP) and Consolidated Edison (NYSE:ED) are forming a joint venture to own and develop CEQP's existing natural gas pipeline and storage business located in northern Pennsylvania and southern New York.

ED will purchase a 50% equity interest in Stagecoach Gas Services for ~$975M, with an implied market value of ~$2B, to be funded with a combination of debt and new equity; CEQP will contribute its existing natural gas pipeline and storage business to the new entity.

Stagecoach will own four natural gas storage facilities with a combined storage capacity of 41B cf and three natural gas pipelines with a combined throughput capacity of 2,960 Mmcf/day; for the first three years following closing, ED will receive 65%, 65% and 60%, respectively, of cash distributed.

In a revised 2016 outlook, CEQP sees adjusted EBITDA of $435M-$465M, distributable cash flow of $275M-$305M, and growth capital spending and JV contributions of $50M-$75M; it is cutting its quarterly distribution to $0.60/unit from $1.375.