Increasing its natural gas gathering and processing footprint in the rapidly growing Fort Worth Basin, Houston-based Enbridge Energy Partners LP (EEP) signed a $247 million purchase agreement with Cantera Resources Inc., an affiliate of Morgan Stanley Capital Partners, for about 2,000 miles of gathering lines and five active processing facilities in North Texas.

The system primarily serves the Fort Worth Basin, including growing production from the Barnett Shale zone. Current gas throughput on the system averages 170 MMcf/d. The processing plants have an aggregate capacity of 217 MMcf/d.

Dan C. Tutcher, president of the partnership’s management company and general partner, said the deal should be “immediately accretive to the partnership’s distributable cash flow and should provide modest growth over the next several years. Second, we believe that local markets for Fort Worth Basin production are nearing saturation and additional market outlets will be required.

“The partnership’s proposed new East Texas System transmission line provides a logical alternative to deliver into the major Carthage, TX, natural gas hub, if suitable interconnections are developed between the North and East Texas Systems,” Tutcher added.

EEP said that the North Texas System derives the majority of its revenues from the sharing of sales proceeds of natural gas and natural gas liquids under contracts with natural gas producers. The company added that the direct commodity price exposure inherent in such contracts will be “suitably mitigated” through a hedging strategy.

Following news of the acquisition, Standard & Poor’s Ratings Services (S&P) said Enbridge Energy Partners LP’s rating or outlook (BBB+/Negative/–) would not be affected.

“The acquired assets complement EEP’s existing natural gas pipeline and gathering assets in East Texas and serve to extend EEP’s operations in the region,” S&P said. “In addition, the purchase price, which represents about eight times the expected [earnings before interest, taxes, depreciation, and amortization] is in line with recent prices paid for similar assets.”

The rating agency added that it does not expect the financing of this acquisition to stall EEP’s efforts to strengthen the master limited partnership’s cash flow protection measures and improve its financial profile.

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