Targa Resources Partners LP said it is buying a stake in a Gulf of Mexico region gas gathering and processing business from its parent, Targa Resources Inc., for about $167.5 million.
The partnership is acquiring the 76.8% interest in Venice Energy Services Co. (VESCO), a joint venture operated by Targa Resources Inc. The assets are near Venice, LA in Plaquemines Parish along the Louisiana Gulf Coast.
Assets involved include two cryogenic processing trains with a combined 750 MMcf/d of capacity; an offshore gathering system with approximately 160 miles of pipelines that captures volumes from the Gulf of Mexico; additional gas supply interconnects (direct or indirect) with Enbridge Mississippi Canyon Gathering System, Tetco South Pass System, Tetco Main Pass System; and various producer-owned pipelines; and gas delivery interconnects to Tetco, Gulf South and Columbia Gulf.
"The business addition increases the partnership's scale and continues to position the partnership for future growth," said Rene Joyce, CEO of the partnership's general partner and of Targa. "Management's goal is to distribute to unit holders a portion of the cash flow accretion associated with this acquisition. If the closing of this acquisition occurs in the third quarter, we plan to recommend an increase to the board of directors in the annualized cash distribution rate of 4 cents to $2.15/common unit for the third quarter of 2010 distribution, compared to the current rate of $2.11/common unit."
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