Access Midstream to acquire midstream compression assets
Access Midstream Partners, LP has agreed to acquire certain midstream compression assets from MidCon Compression, LLC (MidCon), a wholly owned subsidiary of Chesapeake Energy Corporation, for US$ 160 million.
The planned acquisition adds natural gas compression assets, historically leased from MidCon, in the rapidly growing Utica Shale and Marcellus Shale regions. This transaction provides the opportunity to insource a key cost element of the Partnership’s business model at an approximate 8x forward EBITDA multiple and adds future organic growth to the portfolio. The assets include more than 100 compression units with a combined capacity of approximately 200 000 horsepower.
Exterran Partners LP (Exterran) has entered into an agreement to purchase MidCon’s assets in the Partnership’s other operating areas. The Partnership has agreed to long-term compression service arrangements with Exterran in those areas. The acquisition will be funded with borrowings on the Partnership’s revolving credit facility and is expected to close by 31 March, 2014.
J. Mike Stice, Access Midstream Partners’ Chief Executive Officer, commented, “We are pleased to announce this attractive bolt-on acquisition of compression assets in the Utica and Marcellus regions. These assets fit the Access Midstream business model extremely well. Internalising a portion of our compression expense is consistent with maintaining strong visibility to our cash flows. This acquisition is expected to be immediately accretive to distributable cash flow and enhances our organizational capability in this important aspect of our service offering for our producer customers.
“Additionally, we are equally excited to enter into an agreement with Exterran for compression services for our remaining operations. This agreement is consistent with our previous contracts with MidCon, supports our low-risk business model and will allow us to continue to provide excellent service to our customers.”
Adapted from press release by Hannah Priestley-Eaton
Read the article online at: https://www.worldpipelines.com/business-news/18042014/access_midstream_to_acquire_midstream_compression_assets/
You might also like
World Pipelines Podcast: UK pipeline perspectives
In this episode, we look at the work of the Pipeline Industries Guild, in facilitating connections and learning for pipeliners of all kinds in the UK.
Apollo to partner with bp on TANAP gas pipeline
bp and Apollo have announced that they have reached agreements for Apollo-managed funds to purchase a 25% non-controlling stake in BP Pipelines (TANAP) Ltd – bp TANAP – the bp subsidiary that holds bp’s 12% interest in TANAP, owner and operator of the pipeline that carries natural gas from Azerbaijan across Türkiye.
