Southcross Energy Partners LP (NYSE: SXE) announced March 7 it acquired natural gas pipelines near Corpus Christi, Texas, along with contracts related to those pipelines from Onyx Midstream LP and Onyx Pipeline Co. for $40 million in cash.
The pipelines, which range from 12-inches to 24-inches in diameter, transport natural gas to two power plants in Nueces County, Texas under fixed-fee contracts that extend through 2029. Total length of the pipelines is 50 miles. Natural gas volumes through the pipelines averaged 97 million cubic feet per day (MMcf/d) during 2013.
"We are expanding our platform with the acquisition of these pipelines," David Biegler,chairman and CEO of Southcross' general partner, said in the release. "They complement our integrated midstream strategy of delivering products to end-use markets and customers and are significant additions to our pipelines in the Corpus Christi area.”
Funds for the acquisition were drawn from Dallas-based Southcross’ existing credit facility. The transaction is expected to be accretive to Southcross’ distributable cash flow during 2014.
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