Brookfield Infrastructure to sell remaining NGPL stake in $1.7bn exit

Brookfield Infrastructure Partners L.P. has taken another step in its capital recycling strategy by agreeing to sell its remaining 25% stake in Natural Gas Pipeline Company of America LLC (NGPL) for approximately $1.7 billion. The deal marks a complete exit from the business, reflecting the company’s broader effort to optimize its portfolio by divesting mature assets and redeploying capital into higher-growth opportunities.

This move aligns with Brookfield Infrastructure’s strategy of unlocking value from long-term infrastructure investments, having generated an 18% internal rate of return (IRR) and a threefold multiple on its initial investment since its 2015 recapitalization. The sale, which will deliver more than $900 million in proceeds over the last 18 months, highlights strong market demand for energy infrastructure assets despite shifting dynamics in the natural gas sector.

How Did Brookfield Infrastructure Build Its Position in NGPL?

Brookfield Infrastructure first entered NGPL through its acquisition of a 27% stake from Babcock & Brown Infrastructure. The company later increased its ownership to 50% in 2015, when it partnered with another operator to buy out a consortium of minority stakeholders. This recapitalization provided Brookfield Infrastructure with a controlling influence over the pipeline’s financial strategy while leveraging the operational expertise of its partners.

During its tenure, Brookfield Infrastructure focused on value creation through organic growth initiatives. It expanded NGPL’s pipeline infrastructure, improving connectivity between key natural gas supply basins and end-user markets, including utility providers and liquefied natural gas (LNG) export terminals. Additionally, Brookfield Infrastructure invested in upgrading compression stations and optimizing network capacity to increase efficiency. These strategic developments enhanced NGPL’s role as a critical link in the U.S. energy supply chain.

Who Is Acquiring Brookfield Infrastructure’s Stake in NGPL?

The buyer, ArcLight Capital Partners, LLC, is set to take control of Brookfield Infrastructure’s remaining interest in NGPL Holdings LLC, the indirect parent company of NGPL. Upon completion of the transaction, which is expected to close in the second quarter of 2025, ArcLight will own 62.5% of NGPL Holdings. Meanwhile, Kinder Morgan, Inc., which operates NGPL’s pipeline network, will retain its 37.5% stake.

NGPL is one of the largest interstate natural gas pipeline systems in the United States, spanning 9,100 miles and serving high-demand markets such as Chicago. The system plays a crucial role in supplying natural gas to industrial consumers, power plants, and major LNG export terminals along the Texas and Louisiana Gulf Coast. With over 1 million compression horsepower and 288 billion cubic feet of storage capacity, NGPL remains a key component of North America’s energy infrastructure.

How Does This Sale Fit into Brookfield Infrastructure’s Capital Recycling Strategy?

Brookfield Infrastructure has been aggressively pursuing an asset rotation strategy to free up capital for reinvestment in higher-growth segments. The company aims to monetize between $5 billion and $6 billion in assets over the next two years, with a focus on infrastructure that offers stronger long-term returns.

Since the beginning of 2025, Brookfield Infrastructure has already secured more than $700 million from asset sales, with projections indicating this figure could reach nearly $900 million in the coming months. The NGPL divestment represents a significant portion of these proceeds and aligns with similar recent transactions, including the ongoing sale of a European data center portfolio.

The company recently finalized the first phase of its data center monetization strategy, signing a deal to sell a 30% stake in a 244-megawatt portfolio of fully operational sites in Europe for approximately $460 million. Brookfield Infrastructure is currently negotiating the sale of an additional 60% interest in the portfolio, which is expected to be finalized in the near future.

What Does This Mean for Brookfield Infrastructure Investors?

Brookfield Infrastructure’s stock (NYSE: BIP) has shown resilience despite market volatility. The company’s shares are currently trading at $29.80, reflecting a 3.78% gain over the past week. However, on a broader scale, Brookfield Infrastructure has faced pressure, with a 13.62% decline over the past month and a 3.43% decrease over the past year.

The company’s financial fundamentals remain stable, with a current ratio of 0.77, indicating sufficient liquidity to meet short-term obligations. Additionally, Brookfield Infrastructure continues to offer a dividend yield of approximately 5.78%, making it attractive to income-focused investors despite recent stock price fluctuations.

Market analysts suggest a “Hold” position on Brookfield Infrastructure stock, as the success of its capital redeployment strategy remains a key factor in future growth. While the NGPL divestment strengthens the company’s balance sheet, investors will closely watch how Brookfield Infrastructure reinvests its proceeds to drive long-term shareholder value.

What Are the Market Implications of This Sale?

The NGPL transaction highlights continued institutional interest in stable, cash-generating energy infrastructure assets. With ArcLight Capital Partners increasing its stake, the investment firm solidifies its presence in the U.S. natural gas sector, positioning itself to benefit from the steady demand for natural gas transportation.

For Kinder Morgan, which retains operational control of NGPL, the deal ensures continuity in pipeline management while maintaining access to a strategically valuable asset. With natural gas playing a transitional role in the global energy mix, investments in pipeline infrastructure are expected to remain attractive, even as renewable energy adoption accelerates.

Brookfield Infrastructure’s exit from NGPL does not signal a retreat from the energy sector but rather a shift in investment priorities. The company continues to target sectors with high-growth potential, including digital infrastructure, energy transition assets, and transportation networks.

As Brookfield Infrastructure advances its portfolio optimization strategy, further asset sales and capital redeployments are likely in the months ahead, reinforcing its commitment to maximizing investor returns.