Plains All American Pipeline LP agreed on June 8 to the sale of natural gas storage facilities along the U.S. Gulf Coast to an affiliate of Hartree Partners for $850 million in cash.
The transaction, according to a release from the Houston-based company, includes the Pine Prairie and Southern Pines energy centers, which Hartree Co-founder Steve Semlitz called “two of the highest performing natural gas storage facilities in the U.S.” The assets consist of approximately 70 Bcf of total working gas capacity across nine caverns in Louisiana and Mississippi, along with associated base gas, header pipelines and compression facilities.
“We are attracted to the facilities’ strategic location in the Gulf Coast and diverse mix of pipeline, utility and LNG customers,” Semlitz said in a statement.
The transaction is expected to close in the third quarter, positioning Plains to exceed its $750 million asset sales target for the year, ultimately marking a key sep in the company’s plan to reduce debt and increase investor returns, said Willie Chiang, chairman and CEO of Plains.
“This is a win-win transaction for both parties,” Chiang said in a statement. “Plains is exiting at an attractive valuation within a timeframe consistent with our expectations, while Hartree is receiving high-quality critical infrastructure in a strategic market.”
As of June 30, Plains will re-classify the Pine Prairie and Southern Pines assets associated with the transaction to “held for sale” on its balance sheet and recognize a corresponding non-cash loss of approximately $480 million in accordance with GAAP requirements, according to the company release.
Wells Fargo Securities LLC served as Plains’ exclusive financial adviser for the transaction. Meanwhile, Vinson & Elkins LLP acted as legal counsel to Plains and Milbank LLP acted as legal counsel to Hartree.
Recommended Reading
Beyond Energy: EnergyNet Expands Marketplace For Land, Real Assets
2024-09-03 - A pioneer in facilitating online oil and gas A&D transactions, EnergyNet is expanding its reach into surface land, renewables and other asset classes.
Weatherford Announces Acquisition of Technology Company Datagration
2024-09-03 - The acquisition gives Weatherford International digital offerings for production and asset optimization and demonstrates its commitment to continuously driving innovation across its technology portfolio, the company said.
Voyager Midstream Buys Haynesville G&P Assets from Phillips 66
2024-09-03 - Voyager Midstream acquired about 550 miles of natural gas pipelines, 400 MMcf/d of gas processing capacity and 12,000 bbl/d of NGL production capacity.
DNO Buys Stakes in Five Norwegian Sea Fields from Vår Energi
2024-09-03 - DNO’s acquisition of stakes from Vår Energi includes interests in four producing fields—Norne, Skuld, Urd and Marulk— and the Verdande development.
Transocean Scores $232MM Contract for Deepwater Atlas
2024-09-11 - Transocean’s newest $232 million ultra-deepwater contract follows the company’s $123 million contract for six wells offshore India by Reliance Industries.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.