EnLink Midstream LLC (ENLC) dropped down its equity interests in E2 Appalachian Compression LLC and E2 Energy Services LLC to EnLink Midstream Partners LP (ENLK), ENLK announced on Oct. 22. Total consideration for the transaction is about $193 million, which includes $163 million cash and about 1 million ENLK units. ENLC intends to use most of the cash from the transaction to repay debts. This is the first dropdown from ENLC to ENLK as part of ENLK’s strategic growth strategy, the statement said.
E2’s assets include five condensate stabilization and natural gas compression stations with combined capacities of 19,000 barrels per day of condensate stabilization and 580 million cubic feet per day of gas compression. The assets are located in the Utica/Marcellus region, where EnLink Midstream plans to have invested about $700 million by the end of 2015. Three of the five E2 stations are currently operational, and the other two are expected to enter service in the first half of 2015. All of the assets are supported by a long-term, fee-based contract with Antero Resources. Once all of the assets are operational, they are expected to generate adjusted EBITDA of about $20 million to $25 million per year.
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