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AMID announces additional interest in Destin pipeline

Published by
World Pipelines,


American Midstream Partners, LP (AMID) announced its acquisition and closing of an additional 17.0 % equity interest in the Destin pipeline from affiliates of ArcLight Capital Partners, LLC (ArcLight), which controls the general partner of AMID, for a total consideration of approximately US$30 million.

Post-closing, AMID will own a 66.67% interest in the Destin pipeline. The acquisition was made in connection with ArcLight’s right – as a current member in the Destin pipeline – to acquire a portion of an equity interest divested by another member of Destin.

The purchase of the additional interest in the Destin pipeline is immediately accretive to Adjusted EBITDA and distributable cash flow. The acquisition of additional Destin pipeline interests is an extension of AMID’s commitment to reallocating capital in a portfolio of interconnected, complementary assets with predictable cash flows. AMID expects strong returns from Destin, driven by continued development in the deepwater Gulf of Mexico. AMID’s combined interests in the Destin and High Point gathering and transmission systems cover more than 10 000 square miles of active production in the Gulf. In addition, the onshore segment of the Destin line provides gas transmission into an active region serving the southeast market.

“The drop down of incremental interest in Destin is consistent with our strategy to increase our ownership in strategic fixed fee deepwater Gulf and critical offshore infrastructure,” stated Lynn Bourdon, Chairman, President and Chief Executive Officer. “We will continue to make strategic investments in each of our core areas to further our participation in the value chain that can drive create sustainable distributable cash flow growth to our partnership.”

The terms of the acquisition were approved by the board of directors of the general partner of AMID.

The Destin pipeline is a FERC regulated, 255 mile natural gas transport system with total capacity of 1.2 billion ft3/d. The system originates offshore in the prolific Mississippi Canyon and includes connections with four producing platforms, and six producer-operated laterals, including Delta House. The 120 mile offshore portion of the system terminates at Enterprise Products Partners L.P. 1.5 billion ft3/d Pascagoula processing plant and is the single source of raw natural gas to the plant. The onshore portion of Destin is the sole delivery point for merchant quality gas from the Pascagoula plant and extends 135 miles north in Mississippi to transport gas to 11 connected pipelines and storage facilities. Destin’s onshore pipeline serves as a large header system allowing gas from the midcontinent, east Texas and Terryville areas to reach premium markets in the southeast. Contracted volumes on Destin are based on life of field dedication, long term contracts, or interruptible volumes as capacity permits. AMID assumed operatorship of Destin from BP plc Group in late 2016.

Read the article online at: https://www.worldpipelines.com/business-news/31102017/amid-announces-additional-interest-in-destin-pipeline/

 

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