Crestwood Equity Partners LP and Crestwood Midstream Partners LP announced that Crestwood Equity has completed the previously announced sale of Tres Palacios Gas Storage LLC to the newly formed joint venture between Crestwood Midstream and an affiliate of Brookfield Infrastructure Group for total cash consideration of $130 million. Crestwood Midstream will own 50.01% of Tres Palacios Holdings LLC and will be the operator of Tres Palacios and its assets.
As part of the transaction, Brookfield Infrastructure has entered into five-year, fixed-fee contracts with Tres Palacios for 15 billion cubic feet of firm storage capacity and 150,000 dekatherms per day of enhanced interruptible wheeling services, effective Nov. 1, 2014.
“We are pleased to complete the sale of Tres Palacios to TPH LLC,” stated Robert G. Phillips, chairman, president and CEO of Crestwood’s general partners. “This transaction is an important step in establishing Crestwood Equity as a pure-play general partner MLP and positions Tres Palacios with the much broader financial resources of Crestwood Midstream and Brookfield Infrastructure to capture expansion opportunities along the Texas Gulf Coast region. We look forward to working closely with Brookfield Infrastructure as a partner, which has a proven track record of developing energy assets throughout North America.”
Crestwood Midstream funded its $65 million portion of the purchase price utilizing its $1 billion revolving credit facility. Crestwood Equity utilized the total cash received from the sale to repay approximately $130 million of outstanding borrowings under its revolving credit facility. Pro forma for this transaction, Crestwood Equity’s leverage ratio as defined in its revolving credit facility would have been 3.4x as of Sept. 30, 2014.
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