EnLink Midstream announced Sept. 29 it will buy Chevron Corp.’s (NYSE: CVX) Gulf Coast natural gas pipeline systems, boosting its Louisiana market presence for $235 million.
In March, Devon Energy Corp. (NYSE: DVN) combined its U.S. midstream assets with Crosstex Energy LP to create EnLink Midstream Partners LP (NYSE: ENLK) and EnLink Midstream LLC (NYSE: ENLC).
EnLink said the assets, which includes the Bridgeline, Sabine and Chandeleur systems, are primarily located in southern Louisiana.
The assets include 1,400 miles of gas pipelines spanning from Beaumont, Texas, to the Mississippi River corridor and about 11 billion cubic feet (Bcf) of working natural gas storage capacity.
Dallas' EnLink will also gain ownership and management of the title tracking services offered at the Henry Hub, the delivery location for New York Mercantile Exchange natural gas futures contracts. Henry Hub is connected to 13 major interstate and intrastate natural gas pipeline and storage systems.
falseCombined with its existing Louisiana holdings, the assets will provide EnLink with tremendous optionality to provide services to southern Louisiana’s growing industrial, refining and petrochemical marketplace.
“The assets will support our growth strategy by expanding our franchise position in southern Louisiana, a dynamic and growing market we know well,” said Barry E. Davis, EnLink president and CEO, in a statement. “These high-quality assets will complement our existing business and provide us with opportunities to serve a wider range of customers with an expanded range of services.”
falseThe deal will strengthen Louisiana’s position in the developing industrial, refining and petrochemical market. It also marries the system to EnLink’s combined assets there.
EnLink holds assets in the Barnett, Permian Basin, Cana-Woodford, Arkoma-Woodford, Eagle Ford, Haynesville, Gulf Coast, Utica and Marcellus regions.
The company own nearly 7,400 miles of gathering and transportation pipelines, 13 processing plants with 3.4 Bcf/d of net processing capacity, seven fractionators with 252,000 barrels per day of net fractionation capacity. The company also has barge and rail terminals, product storage facilities, brine disposal wells and other assets.
EnLink consists of two publicly traded entities: the MLP, EnLink Midstream Partners LP; and the publicly traded general partner, EnLink Midstream LLC.
The transaction, which is expected to be completed in the fourth quarter of 2014, is subject to the satisfaction of customary closing conditions contained in the agreement.