EnLink Midstream to acquire Gulf Coast natural gas pipeline assets

The EnLink Midstream companies have announced that a subsidiary of the Partnership has signed a definitive agreement with Chevron Pipe Line Company and Chevron Midstream Pipelines LLC to acquire Gulf Coast natural gas pipeline assets.

These assets include the Bridgeline system, which is predominantly located in Southern Louisiana. The total value of the acquisition is US$ 235 million, subject to adjustments.

Southern Louisiana market

The natural gas assets include approximately 1400 miles of natural gas pipelines spanning from Beaumont, Texas to the Mississippi River corridor and approximately 11 billion ft³ of working natural gas storage capacity in Southern Louisiana. These natural gas assets, combined with the Partnership’s existing Louisiana assets, will provide EnLink Midstream with considerable 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,” explained Barry E. Davis, EnLink Midstream President and CEO. “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.”

Strategic advantages

The acquisition of these assets will provide strategic advantages:

• Expands EnLink’s franchise position in Louisiana’s rapidly developing industrial, refining and petrochemical market;
• Generates system-optimisation and operational cost synergies with EnLink’s existing Louisiana natural gas system;
• Enhances the optionality of EnLink’s combined Louisiana assets; and
• Provides new service offerings to existing and new customers in the growing Louisiana market.

Pipeline assets

The assets to be acquired include:

• Bridgeline System: approximately 985 miles of natural gas pipelines in Southern Louisiana with a total system capacity of approximately 920,000 million ft³/d;
• Sabine System: approximately 150 miles of natural gas pipelines in Texas and Southern Louisiana with a total capacity of approximately 235,000 ft/³;
• Chandeleur System: approximately 215 miles of offshore Mississippi and Alabama pipelines with a total capacity of approximately 330,000 million ft³/d;
• Storage Assets: three caverns located in Southern Louisiana with a combined working capacity of approximately 11 billion ft³, including two near Sorrento, LA with a capacity of approximately 4 billion ft³ and one inactive cavern near Napoleonville, LA with approximately 7 billion ft³ of capacity; and
• Henry Hub: ownership and management of the title tracking services offered at the Henry Hub, the delivery location for NYMEX natural gas futures contracts. Henry Hub is connected to 13 major interstate and intrastate natural gas pipeline and storage systems.

The transaction is expected to be completed in Q4 2014.

Adapted from press release by Katie Woodward

Read the article online at: https://www.worldpipelines.com/business-news/03102014/enlink-midstream-acquires-louisiana-pipeline-assets-876/