EXCLUSIVE Southwest Gas nears Questar deal after Buffett lost out-sources

Oct 3 (Reuters) - Southwest Gas Holdings (SWX.N) is in advanced talks to acquire Questar Pipeline Company, a gas transportation and storage business of Dominion Energy Inc (D.N) that Warren Buffett tried to buy, people familiar with the matter said on Sunday.

The deal would come three months after Dominion and the energy arm of Buffett's Berkshire Hathaway Inc (BRKa.N) abandoned their Questar deal on concerns that antitrust regulators would not approve it. Dominion then launched an auction process to divest Questar. read more

Southwest Gas, a gas distribution company that serves Arizona, California and Nevada, will pay close to $2 billion, including debt, for Questar, whose pipeline and storage network spans Colorado, Utah and Wyoming, the sources said.

That would be an improvement on the deal with Berkshire Hathaway, which had agreed to pay $1.3 billion in cash for Questar and assume $430 million in debt. If the negotiations conclude successfully, Dominion could announce a deal with Southwest Gas as early as this week, the sources said.

The sources requested anonymity because the matter is confidential. Dominion and Southwest Gas did not respond to requests for comment.

Questar moves natural gas through 1,867 miles (3,005 km) of pipeline, with connections to other pipeline systems in the West and Midwest United States. It also owns the Clay Basin storage facility, the largest underground storage reservoir in the Rocky Mountains, according to its website.

Dominion announced in July 2020 that it would sell its entire gas infrastructure business to Berkshire Hathaway's energy arm for $9.7 billion including debt. While a deal for most of the assets was completed in November 2020, Questar was left out as the Federal Trade Commission scrutinized the acquisition. The companies abandoned the Questar deal in July this year, citing uncertainty over its regulatory approval.

For Southwest Gas, the acquisition would mark a northward expansion of its natural gas operations and boost its regulated operations, which supply steady cash flow and are preferred by utility investors. It also owns Centuri, a company which services pipelines.

Reporting by David French in New York; Editing by Daniel Wallis

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