Martin Midstream Partners LP (NASDAQ: MMLP) announced May 5 its subsidiary will acquire a 20% stake in West Texas LPG Pipeline LP (WTLPG) from Philadelphia's Atlas Pipeline Partners LP (NYSE: APL) for $135 million in cash.
Kilgore, Texas-based Martin will acquire all of the outstanding membership interests in Atlas Pipeline NGL Holdings LLC and Atlas Pipeline NGL Holdings II LLC, which together owns the 20% stake in WTLPG. WTLPG is operated by Chevron Pipe Line Co., an affiliate of Chevron Corp. (NYSE: CVX), which owns the remaining 80% interest.
WTLPG owns some 2,300 miles of pipeline with long-haul capacity of an estimated 240,000 barrels per day and volumes that have been at or near capacity since 2011. This transaction marks the first significant investment by Martin tied to the growing Permian Basin.
Martin will fund the transaction using available capacity under its revolving credit facility and expects closing to occur in the second quarter of 2014.
Citigroup Global Markets Inc. was financial advisor and Jones Day was legal advisor for this transaction.
Atlas Pipeline Partners is the midstream subsidiary of Atlas Energy LP (NYSE: ATLS), a master limited partnership (MLP) which also owns the upstream subsidiary Atlas Resource Partners LP.
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