El Paso Corp. on Wednesday completed the sale of its interests in two separate sets of midstream assets located in Louisiana and Texas for a total of $642 million, while Kerr-McGee Corp. sold its 40% stake in one of the plants for $156 million.
CrossTex Energy LP, which operates 5,000 miles of pipelines, nine processing plants and four fractionators, bought some of El Paso's processing and fractionation facilities in southern Louisiana for $486 million. Final proceeds on the sale were reduced by $14 million to reflect adjustments to working capital and other items.
CrossTex's new assets include 2 Bcf/d of processing capacity, 66,000 bbl/d of fractionation capacity, 2.4 million bbl of underground storage, and 450 miles of liquids transport lines. The assets are expected to give CrossTex the opportunity to participate in the growing development of deepwater Gulf of Mexico reserves.
"These assets have been operated by a great group of employees, and we welcome them as our new teammates in South Louisiana and in our new Houston office," said CrossTex CEO Barry E. Davis. "We expect a smooth integration with our existing South Louisiana assets, and expect to be able to capitalize on synergies almost immediately."
MarkWest Energy Partners LP, a publicly traded master limited partnership, bought El Paso's Javelina midstream interests for $156 million, which includes adjustments to working capital of $14 million. The sale includes El Paso's 40% stake in the Corpus Christi, TX-based Javelina natural gas processing and fractionation facility and associated natural gas pipelines. MarkWest also secured Kerr-McGee's non-operated stake in the Javelina plant on Wednesday for $156 million, including adjustments for working capital.
The Javelina gas processing facility treats and processes off-gas from six refineries in the Corpus Christi area. The facility was constructed in 1989 to process refinery off-gas and recover up to 28,000 bbl/d of natural gas liquids, as well as hydrogen. The facility currently processes 125-130 MMcf/d inlet gas but is expected to increase as refinery output continues to grow.
Both El Paso and Kerr-McGee plan to use the proceeds from the sales to pay down debt.
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