A unit of Enbridge Energy Partners LP is buying gas gathering, treating and processing assets in Oklahoma and Texas that the partnership says will bolt on nicely to its existing Anadarko system, it said Wednesday.

Enbridge Pipelines (TX Gathering) LP plans to acquire the entities that comprise the Elk City Gathering and Processing System (ECOP) from Atlas Pipeline Partners (APL) for $682 million.

"Consolidation of these assets with our Anadarko system will provide immediate benefits to natural gas producers in the area and the partnership. The ECOP system has excess processing capacity available, and the partnership has access to excess rich gas that can be used to fill this capacity," said Terrance L. McGill, president of the partnership's management company and of its general partner. "Strategically, this acquisition further solidifies Enbridge's ability to capitalize on growth in the Granite Wash..."

The acquisition is expected to close by the early fourth quarter, and will be accretive to earnings upon integration with the partnership's Anadarko system.

The ECOP system comprises 800 miles of gas gathering pipeline, one hydrogen sulfide treating plant, three cryogenic processing plants with capacity of 370 MMcf/d and a combined current natural gas liquid (NGL) production capability of 20,000 b/d. Extending from Washita County in southwestern Oklahoma to Hemphill County in the Texas Panhandle, the ECOP system complements the Anadarko system, which includes six gas processing plants and approximately 1,800 miles of gas gathering and transportation pipelines in southwestern Oklahoma and the Texas Panhandle, Enbridge said.

In April Enbridge said it would construct a new cryogenic processing plant on its Anadarko system to handle NGLs from the Texas Panhandle's Granite Wash (see Daily GPI, April 13).

APL said it would use the transaction proceeds to pay off its $422 million secured term loan and repay approximately $250 million of its revolving credit facility, leaving an anticipated $340 million of liquidity under this line and an outstanding balance of approximately $40 million.

"Over the past several quarters APL's management team has communicated that it was evaluating strategies that would improve the partnership's balance sheet, grow its strategic asset base and allow for the resumption of distributions to our unitholders. We believe this transaction accomplishes all those objectives and provides a balanced approach to debt reduction. The transaction provides significant upside for growth, particularly in our Laurel Mountain Midstream asset in the Marcellus Shale," said APL CEO Eugene Dubay.

"In addition, we have reduced our commercial risk and positioned our business to capitalize on fresh strategic and accretive growth projects going forward. Based on a successful close of the transaction and our current projections, we expect to resume distributions in the fourth quarter of 2010."

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