Regency Energy Partners LP has sold its east Texas gathering and processing assets to an affiliate of Tristream Energy LLC for about $70 million. Dallas-based Regency said it intends to use proceeds to fund growth opportunities.

"The sale of Regency's East Texas assets allows us to place greater focus on the expansion of core assets within higher-growth regions, including several of the major shale plays," said Regency CEO Byron Kelley. "This transaction will be immediately accretive to unitholders, and we expect it to positively impact our credit metrics by improving our fee-based business mix."

The assets sold are primarily in Wood, Van Zandt and Henderson counties and include approximately 371 miles of gathering pipeline, approximately 20,000 hp of compression, a condensate sweetening plant in Myrtle Springs, TX, and gas treating and processing facilities in Eustace, TX. Also included in the sale are two idle processing facilities and an idle fractionation tower.

"Regency is focused on some of the most prolific gas producing regions in the United States, including the Haynesville, Eagle Ford,Barnett, Fayetteville and Marcellus shales," a spokesperson said.

Tristream is a private midstream company headquartered in Sugar Land, TX, which is owned by its management and Haddington Energy Partners III LP, a private equity fund sponsored by Haddington Ventures LLC of Houston.

In late May Regency said Energy Transfer Equity LP closed on the previously announced purchase of the general partner interest in Regency Energy Partners LP (see Daily GPI, May 12). In addition, Regency said it closed on the purchase of a 49.9% ownership interest in the Midcontinent Express Pipeline.

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.