UPDATE 2-Energy Transfer, Regency Energy to buy $1.9 bln midstream assets
* Assets to give cos stake in nat gas liquid boom
* Assets sold by Louis Dreyfus Highbridge Energy LLC
* ETP to contribute $1.35 bln with 70 pct stake
* Regency to contribute $578 mln in JV (Adds details on deal, assets sold, Louis Dreyfus statement)
March 22 (Reuters) - Energy Transfer Partners and Regency Energy Partners partnered to buy some natural gas liquids storage and transportation assets from Louis Dreyfus, one of the world's top commodity firms, for about $1.92 billion in cash to join in the growing shale activity in Texas.
The acquisition would give the joint venture (JV) between Energy Transfer and Regency Energy a firm foothold to feed the surging appetite for natural gas liquids, which has also prompted higher drilling and exploration activity in the liquid-rich shale plays, such as the Permian Basin.
The assets bought by the JV include a storage facility at Mont Belvieu, Texas -- one of the largest natural gas liquids storage, distribution and trading complexes in North America -- and a pipeline from the Permian Basin to Mont Belvieu.
Other assets include a storage facility at Hattiesburg, Mississippi; fractionation facilities and a stake in a cryogenic gas processing plant in Louisiana and projects in varying stages of development, Louis Dreyfus said in a statement.
Energy Transfer Partners will contribute $1.35 billion for 70-percent stake in the JV and the right to operate the assets while Regency Energy will contribute $578 million for the rest.
The acquisition, which is expected to close in the second quarter of 2011, will also provide both companies with additional consistent fee-based revenues, Energy Transfer said in a separate statement.
The joint venture will be managed by a two-person board of directors, with both parties appointing one director.
Goldman, Sachs & Co and Barclays Capital Inc acted as financial advisors to Louis Dreyfus.
Energy Transfer Partners' owner, Energy Transfer Equity bought a 100-percent interest in Regency's general partner in May last year from an affiliate of a unit of General Electric .
Energy Transfer Partners' shares closed at $53.34 on Tuesday on the New York Stock Exchange. Regency Energy's shares closed at $26.55 Tuesday on Nasdaq. (Reporting by Swetha Gopinath; Editing by Joyjeet Das) (firstname.lastname@example.org; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 580; Reuters Messaging: email@example.com)
- Tweet this
- Share this
- Digg this