Natural gas storage leader Rockpoint files for Canadian IPO

Investing.com -- Rockpoint Gas Storage Inc., a Brookfield Infrastructure-backed operator of natural gas storage facilities, is preparing to enter public markets through an initial public offering on the Toronto Stock Exchange. The IPO will consist of a primary treasury offering and a potential secondary offering contingent on the exercise of an Over-Allotment Option by underwriters, with Brookfield affiliates acting as the selling shareholders.

The company seeks to list its Class A shares under the symbol “RGSI,” though formal approval from the TSX remains pending. Proceeds from the primary offering will fund Rockpoint’s acquisition of approximately 40% of operational interests in entities that own and operate North America’s largest independent portfolio of natural gas storage facilities, totalling 279.2 billion cubic feet of working gas capacity.

Rockpoint’s business model is centered on fee-for-service long- and short-term storage contracts, supported by a high-quality customer base and strategic infrastructure assets in Alberta and California. As of fiscal 2025, roughly 86% of its Adjusted Gross Margin came from fee-based services, exceeding its target of 85%, with 45% from long-term “Take-or-Pay” (ToP) contracts and 41% from seasonal short-term (STS) contracts.

The company’s performance in California has shown strong growth, with ToP contracted demand charges rising from $1.02 per Dth in fiscal 2023 to $2.30 per Dth in fiscal 2025. Alberta has also exhibited gains, with ToP demand charges expanding from $0.42 to $0.75 over the same period, as infrastructure expansion and LNG projects support long-term regional demand.

Rockpoint believes it is well positioned to leverage growing demand for natural gas storage driven by the rise of LNG exports, gas-fired generation to support data center growth, and the increasing need for flexibility in power systems with heavy renewable integration. North American gas demand reached 123 Bcf/d in 2024, up from 92 Bcf/d in 2016, and is projected to climb to 144 Bcf/d by 2030.

With only limited additions to North American gas storage infrastructure projected, Rockpoint sees value in its scarcity-advantaged storage assets. Its key facilities, including the AECO Hub™, Wild Goose, and Lodi, offer high deliverability and are entrenched in major supply and demand corridors.

Rockpoint maintains a long-term annual Adjusted EBITDA growth target of 4% to 5%, translating into an expected 5% to 6% growth in Distributable Cash Flow. The company also targets a sustainable dividend payout of 50% to 60% of distributable cash flow generated by the underlying OpCos.

Brookfield will retain economic and voting control of Rockpoint through a combination of Class A and 100% of Class B shares, equating to approximately 60% ownership in the underlying gas storage operations and majority voting rights in the listed entity.

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