Canada Pension Plan, Williams to form $3.8 billion Marcellus-Utica shale gas venture

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(Reuters) – Canada Pension Plan Investment Board is expanding its presence in the North American natural gas market through a $3.8 billion joint venture with U.S. energy firm Williams Cos Inc, which will hold pipeline assets in the Marcellus and Utica shale basins, the biggest gas-producing region in the United States.

Canada’s largest pension fund will invest about $1.34 billion for a 35 percent stake in the venture, with Williams holding the rest and operating the combined business, the companies said on Monday.

“This joint venture will provide CPPIB additional exposure to the attractive North American natural gas market, aligning with our growing focus on energy transition,” said Avik Dey, managing director, head of energy & resources, CPPIB.

Pipeline infrastructure in the Utica and Marcellus shale basins, which span Pennsylvania, Ohio and West Virginia, are attracting huge investments after a resurgence in drilling activity over the last few years led to tight pipeline capacity.

A privately held company backed by CPPIB and Encino Energy last year signed a deal to buy the Chesapeake Energy’s entire natural gas assets in Ohio.

The companies said on Monday that the venture includes Williams’ Ohio Valley Midstream system in the Marcellus shale basin and the Utica East Ohio Midstream system.

Reporting by John Benny in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila