Energy Transfer Partners LP said Monday that Blackstone Energy Partners will acquire a 32.4% stake in the Rover Pipeline project, which has faced environmental scrutiny due to spills of drilling mud in Ohio wetlands earlier this year.
Blackstone’s BX, -0.24% energy-focused private-equity fund will pay $1.57 billion in cash for a 49.9% stake in ET Rover Pipeline LLC, which is a subsidiary of ETP ETP, +0.53% and majority owner of the pipeline.
After the transaction, which is expected to close in the fourth quarter, Energy Transfer will own 50.1% of ET Rover. Energy Transfer Partners said it would use deal proceeds to pay down debt and fund growth projects.
The $4.2-billion Rover Pipeline, which is still under construction, has been beset by multiple industrial spills and other issues as crews work to prepare it for full service. The more-than-700-mile pipeline is expected to carry 3.25 billion cubic feet of natural gas a day across West Virginia, Eastern Ohio, Western Pennsylvania and Canada.
An expanded version of this report appears on WSJ.com.
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