Atlas Pipeline Partners LP (APL) on Monday agreed to pay $600 million for all of the operating assets of privately held Cardinal Midstream LLC, which would give it cryogenic processing plants, associated gathering pipelines and a gas treatment business that includes facilities in the Woodford, Eagle Ford, Haynesville and Fayetteville shales, as well as the Granite Wash and Avalon formations.

More than 80% of Cardinal’s gross margins are fixed-fee contracts, APL said.

“The profile of assets fits very well with our core focus, which is gathering and processing in liquids-rich basins with increasing producer activity. The Cardinal assets are close to our assets in the Woodford Shale, about 50 miles from our Velma [OK] area of operations,” said APL CEO Eugene Dubay (see Shale Daily, Nov. 2).

“The Arkoma portion of the Woodford, which is a new area for us, is a high natural gas liquids (NGL), wet gas play that has seen strong activity, which has enabled the current Cardinal facilities to be fully utilized, producing growing cash flow that is primarily fixed fee.”

The transaction would give APL the Tupelo plant in the Arkoma Woodford Basin, which is a 120 MMcf/d cryogenic processing facility, along with 60 miles of gathering lines (see Shale Daily, March 29). Included is 28,500 hp compression capability, including a 42 MMcf/d facility and a treating facility. A gas treating business includes contract gas treating operations in the Midcontinent unconventional plays, with 15 amine treating facilities and two propane refrigeration units.

Included in the purchase is the planned Stonewall plant, scheduled to be expanded late next year, which is to have initial capacity of 120 MMcf/d and be scalable to 200 MMcf/d. In addition, the partnership would have a stake in the Centrohoma joint venture (JV) in which Cardinal is partnering with MarkWest Energy Partners LP. Centrohoma, which APL would operate, owns the Coalgate (80 MMcf/d) and Atoka (20 MMcf/d) cryogenic plants and 15 miles of NGL pipeline (see Shale Daily, Oct. 5, 2010).

Because of the transaction, set to be completed by the end of the month, APL increased its earnings guidance for 2013 by more than 20% to $310-360 million from $250-300 million.