ONEOK Partners LP agreed to acquire NGL pipelines and related assets from Chevron Corp. affiliates for about $800 million, subject to customary post-closing adjustments.
Included in the transaction is an 80% interest in the West Texas LPG Pipeline Limited Partnership and 100% interest in the Mesquite Pipeline, which together consist of about 2,600 miles of NGL gathering pipelines from the Permian Basin in southeastern New Mexico to East Texas and Mont Belvieu, Texas. The acquisitions will add about 230,000 barrels per day of unfractionated LNG supply to ONEOK Partners’ NGL systems.
After the transaction closes, ONEOK Partners will operate both pipelines. The remaining 20% of West Texas LPG is owned by Martin Midstream Partners LP. The assets are expected to generate about $40 million in annual adjusted EBITDA in 2014 with significant growth potential. The acquisition is expected to close in fourth-quarter 2014. The transaction is subject to customary closing conditions including antitrust clearance from the Federal Trade Commission under the Hart-Scott-Rodino Act. Financing is expected to come from cash on hand or borrowing under the company’s $1.7 billion commercial paper program or existing $1.7 billion credit facility.
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