Union Pacific, Koch Swapping Assets
Union Pacific Fuels and three Wichita, KS-based affiliates of
Koch Industries exchanged certain gas and gas liquids assets in
East Texas and Southern Louisiana. The Koch companies will receive
a portion of Union Pacific's interest in the Panola Pipeline, which
runs from Carthage, TX, to Mont Belvieu, TX. In addition, the Koch
companies will get Union Pacific's interest in the Mont Belvieu I
fractionator as well as the Patterson and Calumet gas plants in
In exchange Union Pacific will receive certain Koch gathering
systems in East Texas and Koch's Longview and East Texas processing
plants, which have combined capacity of 190 MMcf/d. Terms were not
disclosed, and closing is conditioned on regulatory approvals.
"This trade is part of our on-going efforts to better optimize
our natural gas operating assets and improve profitability," said
John Gibson, president of Koch Midstream Gathering and Processing.
"The addition of these assets positions us for continued growth in
the gas liquids business in the Texas Gulf Coast region and will
boost our ability to add value to our customers."
Union Pacific spokesman Pat Doyle said the agreement with Koch
did not allow him to comment on terms of the deal.
"With the addition of the Koch assets, UPFI will be able to
reduce our cost structure and improve our service in East Texas,"
said Don Niemiec, UPFI President. "UPFI will now process 970 MMcf/d
in East Texas and will gather approximately 530 MMcf/d. This
exchange will allow us to compete for incremental volumes of gas
that we previously could not access with our existing
Joe Fisher, Houston
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