Brookfield Infrastructure Partners to Sell Stake in NGPL Pipeline, Marking Full Exit

Brookfield Infrastructure Partners has announced the sale of its entire 25% minority stake in NGPL Holdings, the parent company of the Natural Gas Pipeline Company of America (NGPL), to ArcLight Capital Partners. The transaction is set to close in the second quarter of 2025, subject to customary closing conditions.

The deal involves the sale of entities holding Brookfield’s stake, transferring control to one or more funds managed by ArcLight. Once completed, ArcLight’s funds will hold a 62.5% majority interest in NGPL Holdings, with Kinder Morgan continuing to operate the pipeline assets and maintaining a 37.5% stake.

This divestment marks Brookfield’s full exit from the NGPL pipeline business, generating more than $1.7 billion (C$2.43 billion) in total proceeds and an 18% internal rate of return (IRR). Brookfield’s involvement with NGPL began with the acquisition of a 27% stake through its purchase of Babcock & Brown Infrastructure. Over time, Brookfield increased its ownership, ultimately holding a 50% stake in 2015 after a recapitalization effort.

In June 2023, ArcLight Capital Partners acquired an additional 12.5% interest in NGPL from Brookfield, which brought ArcLight’s stake to 37.5% and reduced Brookfield’s ownership to 25%. Now, with the full exit, ArcLight will solidify its dominant position in NGPL, continuing to leverage Kinder Morgan’s operational expertise.

The NGPL Pipeline and its Strategic Value

The NGPL pipeline system is a significant player in the U.S. natural gas sector. With approximately 9,100 miles of pipeline and over one million horsepower of compression, NGPL plays a vital role in transporting natural gas to major markets, including large liquefied natural gas (LNG) export facilities on the Texas and Louisiana Gulf Coast. It serves as a critical link between natural gas supply basins and consumers, including interconnections with other pipeline systems.

Operating as an indirect subsidiary of NGPL Holdings, NGPL boasts substantial infrastructure, including 288 billion cubic feet of natural gas storage, further enhancing its importance in the national energy network. The pipeline’s role in providing direct access to key gas basins and supporting vital markets makes it a valuable asset in the energy industry.

Brookfield’s Strategic Move and Future Focus

Brookfield Infrastructure Partners’ decision to sell its stake is part of its broader strategy to monetize assets and allocate capital toward other opportunities. The sale reflects the firm’s disciplined approach to managing its portfolio and capital, as it continues to pursue high-return investments across various sectors.

For this transaction, Brookfield enlisted CIBC Capital Markets and RBC Capital Markets as joint financial advisors, with Vinson & Elkins serving as legal advisor. The exit from NGPL provides Brookfield with significant proceeds, which could be reinvested in other infrastructure projects, ensuring continued growth and value creation for its stakeholders.

As ArcLight Capital Partners assumes a controlling stake in NGPL Holdings, the future of the pipeline system looks poised for continued operational stability under the ongoing management of Kinder Morgan, ensuring that the critical energy infrastructure remains a central part of the U.S. natural gas supply chain.