text size
Berkshire Hathaway continues to be a big believer in fossil fuels.
Dimitrios Kambouris/Getty Images
Berkshire Hathaway’s major utility and energy division acquired a 50% interest in Maryland’s Cove Point liquefied natural gas facility for $3.3 billion, according to the Berkshire entity, increasing its stake in the facility to 75%.
Berkshire’s division, Berkshire Hathaway Energy, is one of the country’s largest utilities and also owns natural gas pipelines, a large real estate brokerage firm, and was a sizeable shareholder in BYD, the Chinese electric vehicle maker.
Berkshire bought the 50% stake in Dominion Energy (Ticker D), the East Coast utility. The other 25% stake is held by Brookfield Infrastructure Partners, which is affiliated with Brookfield Asset Management (BAM), the major Canadian investment management company.
The Dominion transaction shows once again that Buffett is willing to invest in fossil fuel-related companies at a time when many companies are hesitant to enter the space. Berkshire owns 25% of Occidental Petroleum (OXY) and a sizable stake in Chevron (CVX) worth about $20 billion.
Berkshire Hathaway Energy was valued at nearly $90 billion when the company repurchased a 1% stake in 2022 from its former CEO Greg Abel, who is now vice chairman of Berkshire Hathaway (BRK/A, BRK/B) and head of the conglomerate’s NGO. insurance transactions. Abel is also the heir to the throne of CEO Warren Buffett, 92.
Berkshire Hathaway is valued at $740 billion. Class A shares fell 0.9% on Monday to $517,136.
In a press release late Monday, Berkshire Hathaway Energy said the purchase “is being funded with cash, including cash from the liquidation of certain investments.” This could refer to sales of BYD shares earlier this year.
The transaction could reflect the growing role Abel plays at Berkshire. In an interview with CNBC earlier this year, he said his relationship with Dominion’s former CEO led to Berkshire Hathaway Energy buying some of Dominion’s natural gas pipeline assets.
One of the Cove Point LNG facility’s major customers is Sumitomo, one of five Japanese trading companies in which Berkshire has a significant stake.
Berkshire Hathaway Energy, which is 92% owned by Berkshire, is one of the conglomerate’s key operating companies. The company owns a group of electric utilities on the West Coast and Midwest and is one of the largest wind power producers in the US. The wind business has brought significant tax credits to Berkshire in recent years.
Write to Andrew Bary at [email protected]