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MarkWest Buys Enterprise's Stake in Starfish Pipeline for $42M

MarkWest Energy Partners L.P. said it will pay Enterprise Products Partners $42.1 million for a 50% non-operating stake in Starfish Pipeline Co., which owns the FERC regulated Stingray natural gas pipeline, the unregulated Triton natural gas gathering system and the West Cameron dehydration facility, all located in the Gulf of Mexico or onshore in southwestern Louisiana.

MarkWest, a publicly traded master limited partnership with core midstream assets in the Appalachian Basin and the Southwest, said the Starfish acquisition is expected to generate cash flow from operations in 2005 of $7.1 million per year. The deal requires Federal Trade Commission approval under the terms of a consent agreement regarding the review of Enterprise Products' merger with GulfTerra Energy Partners L.P.

The Starfish transaction is expected to close in the first quarter and will be financed through existing credit lines, MarkWest said. After closing, MarkWest estimates that it will have a debt/capitalization ratio of 52%.

"The ownership interest in the very strategically positioned Starfish system will be an excellent addition to our asset portfolio," said MarkWest CEO Frank Semple. "This acquisition provides a great opportunity to establish our presence in the Gulf of Mexico and is consistent with our goal of growing quality cash flow from fee-based services. The assets are also well positioned to transport anticipated LNG deliveries from offshore regasification terminals in the Gulf."

MarkWest is the largest processor of natural gas in the Northeast, processing gas from the Appalachian basin and from Michigan. It also has a growing asset base of gas gathering and intrastate gas transmission assets in the Southwest, primarily in Texas and Oklahoma.

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