EnLink Midstream Partners LP (NYSE: ENLK) entered into an agreement to acquire the Victoria Express Pipeline and related truck terminal and storage assets from Devon Energy Corp. (NYSE: DVN) in a dropdown. The pipeline is in the Eagle Ford Shale.
About $171 million in cash, about 338,000 Enlink common units and $30 to $40 million in construction costs make up the total cost which ranges between $210 million and $220 million, Enlink said. Enlink will assume the construction costs, the company added.
The assets include a 56-mile multigrade crude oil pipeline, its destination facilities at the Port of Victoria including an eight-bay truck unloading terminal and 200,000 barrels (bbl) of above-ground storage. Of that amount, 50 Mbbl are under construction. Rights to barge loading docks are also included. Known as the Cuero facilities, these are scheduled to be operational in the second half of 2015.
The pipeline transports condensate from DeWitt County, Texas, to the Port of Victoria. It handles about 50 Mbbl/d. After the Cuero facilities become operational, the pipeline will be a batched system separating condensate for export, unprocessed condensate and crude oil.
Dallas-based EnLink will invest between $30 million to $40 million of additional capital, and it will include construction costs for Cuero. The investment will increase the pipeline’s capacity to about 90 Mbbl/d.
The transaction is scheduled to close April 1.
Oklahoma City-based Devon produced about 98 Mboe/d in the Eagle Ford in 2014’s fourth quarter. Devon will be a shipper for the pipeline, EnLink added.
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