Dominion Peoples, Pittsburgh's largest natural gas utility, is being sold to the San Francisco-based affiliate of an Australian asset management firm in a deal valued at $910 million.

The company's corporate parent, Dominion Inc., announced yesterday that it is selling Dominion Peoples, along with West Virginia's Dominion Hope, to Babcock & Brown Infrastructure Fund North America, an affiliate of Sydney-based Babcock & Brown. The transaction is expected to close in 2009.

Michael Cyrus, the infrastructure fund's chief operating officer, said the firm was among the bidders when Dominion first placed its local assets on the block back in 2006. Dominion accepted a $970 million bid from Equitable Gas in March 2006, but the companies canceled the deal in January after delays in gaining government approval.

Mr. Cyrus expressed the hope of avoiding that type of delay.

"We expect that we'll move as quickly as the process allows us," he said. "The term I've used around here is 'smooth sailing.' "

He said Babcock & Brown Infrastructure intends to make no changes in the workforce or the management of either Dominion Peoples or Dominion Hope, and his firm has informed union leadership that it wants "keep current employees under the current terms of their employment."

Both companies, however, would experience name changes. Dominion Peoples would revert to a name familiar to longtime customers, Peoples Natural Gas, while Dominion Hope would become Hope Gas.

While not disclosing the financing structure of the transaction, Mr. Cyrus said the deal would involve assets and debt "with typical proportions that regulators are used to seeing."

"We've structured it so that we think it'll work for everybody," he said.

The deal with Babcock & Brown Infrastructure would make Dominion Peoples the second local utility to be acquired by an entity with roots in Australia. In June 2007, Duquesne Light was bought by a consortium led by Macquarie Infrastructure Partners, a subsidiary of Macquarie Bank, Australia's largest investment bank.

Babcock & Brown Infrastructure Fund North America is a private entity with its own balance sheet, CEO and management team, spokesman Matt Dallas emphasized, drawing a distinction from the publicly traded Babcock & Brown.

That distinction may be especially important now, as the larger, Australian firm has fallen on troubled times. Babcock & Brown borrowed $2.8 billion in Australian dollars in April on terms that allowed the lenders to review the loan if the company's market capitalization fell below $2.5 billion dollars Australian, or $7.50 Australian a share. Last month, investor concern about that provision helped to trigger the provision, driving the price down from more than $11 Australian, to a low of $5.25 Australian. The company's shares closed yesterday at $7.03 Australian.

None of that has a direct impact on Babcock & Brown Infrastructure, which manages assets from pension plans, insurance companies and other investors. The company owns Trans Bay Cable, a 400 megawatt cable connecting the city of Pittsburg, Calif., with San Francisco, and is part of a consortium that has a majority stake in the Natural Gas Pipeline of America. It also owns an interest in ICS Logistics, which operates sea ports in Florida, Louisiana and Alabama.

The Dominion companies will be the first natural gas utilities in Babcock & Brown Infrastructure's portfolio, a fact that Mr. Cyrus deemed a positive.

"We don't have a holding company that we would fold these into," he said. "We'll focus more on the local assets and activities because these are our only local distribution companies."

The agreement is subject to regulatory approvals in Pennsylvania and West Virginia as well as clearance under the federal Hart-Scott-Rodino Act and under the Exon-Florio provision of the Omnibus Trade and Competitiveness Act.

Sonny Popowsky, consumer advocate with the Pennsylvania Public Utility Commission, said that while the deal does not raise the specter of monopoly the way that Dominion's proposed deal with Equitable Gas did, it would be held to the same standard of PUC review -- namely, that the parties must demonstrate that the sale will produce "a substantial affirmative benefit for Dominion's customers."

Infrastructure has gained heat in recent years as an investment. Pension funds, in particular, are drawn to the category because utilities, toll roads and the like offer relatively stable long-term income with little risk. In May, Pennsylvania's own turnpike drew a bid of $12.8 billion from Abertis Infraestructuras, a Spanish consortium, to operate and maintain the road for 75 years.