Enterprise Products Partners LP, one of the energy industry's
most powerful intermediaries, on Monday said it has agreed to buy
Eagle Ford Midstream assets from Pioneer Natural Resources Co. and
Reliance Industries Ltd. for $2.15 billion.
The EFS Midstream system includes about 460 miles of natural gas
gathering pipelines, 10 central gathering plants, 780 million cubic
feet a day of natural gas treating capacity and 119 thousand
barrels a day of condensate stabilization capacity, Enterprise
said.
The purchase price will be paid in two installments, with the
first $1.15 billion payment due at closing and the balance to be
paid no later than a year after the closing date.
The Pioneer and Reliance joint development will dedicate its
Eagle Ford Shale acreage to Enterprise under a 20-year, fixed-fee
gathering agreement that includes a minimum volume requirement for
the first seven years. Pioneer and Reliance will also dedicate
their Eagle Ford Shale acreage under 20-year fee-based agreements
with Enterprise for natural gas processing and transportation
services.
Enterprise Chief Executive Michael Creel said the deal will
immediately add to distributable cash flow and that the minimum
volume commitments support annual revenue growth.
The deal is expected to be completed in the third quarter,
pending regulatory approvals and closing conditions.
Pioneer and Reliance established EFS Midstream in 2010 to
construct and operate natural gas facilities on a contract basis
for operations in the Eagle Ford Shale trend in South Texas. The
venture operates 11 central gathering plants.
Last fall, Enterprise bought rival pipeline and logistics firm
Oiltanking Partners LP for $5.9 billion, a deal that gave
Enterprise control of the single largest oil-storage operator on
the Gulf Coast.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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