American Midstream Partners LP (AMID) is selling its propane business to focus capital in the offshore Gulf of Mexico and onshore in the Permian Basin and East Texas, the partnership said Monday.

AMID said it has agreed to sell its Propane Marketing and Services segment to multi-national energy company SHV Energy S.V. for $170 million. The deal is expected to close in the third quarter and is subject to customary closing conditions.

The deal would see AMID completely divest from its propane business, including Pinnacle Propane’s 40 service locations, Pinnacle Propane Express’ cylinder exchange business and the Alliant Gas utility system, the Houston-based partnership said.

The proceeds from the propane sale will help fund investments in AMID’s core operating areas, including repaying $32 million borrowed to fund its June 2 acquisition of the Viosca Knoll system from Genesis Energy LP, the partnership said. Viosca Knoll serves the Main Pass, Mississippi Canyon and Viosca Knoll areas of the deepwater Gulf of Mexico and connects to AMID’s High Point and Destin pipelines.

“Over the past few months, AMID’s management team has communicated its strategy to strengthen the partnership’s competitive position in our core areas, evaluate non-core asset sales and reallocate capital to areas with the greatest long-term value,” CEO Lynn Bourdon said. “The sale of the propane business and acquisition of Viosca Knoll are the first steps in implementing a strategy that achieves these goals. Reallocating capital from non-core assets into more strategic investments significantly repositions AMID’s ability to compete and to generate significant unitholder value.”

Wells Fargo Securities LLC acted as financial advisor for the propane transaction, with Gibson, Dunn & Crutcher LLP serving as legal counsel.

AMID operates midstream infrastructure connecting natural gas, crude oil, natural gas liquids, condensate and specialty chemicals to end-use markets. With assets located in the Permian Basin, Eagle Ford Shale, East Texas, the Bakken Shale and the Gulf Coast, AMID operates 4,000 miles of interstate and intrastate pipelines, as well as gas processing plants, fractionation facilities, an offshore semisubmersible floating production system and terminal sites with around 6.7 million bbl of storage capacity.