Proceeds from the sale will be used by AEP to reduce debt and strengthen the balance sheet.
The sale includes LIG’s approximately 3,200km of natural gas gathering and transmission pipelines, and five gas processing facilities that straddle the system.
The acquisition will increase Crosstex’s assets to approximately 7200km of pipeline, 1.2bn cuf/d of transported volume, and over 700m. cuf/d of processing capacity. Crosstex expects the acquisition to increase in distributable cash flow in the first year of ownership by $0.40 per unit, assuming the transaction is 100% debt financed.
Not included in the transaction is Jefferson Island Storage and Hub, which was acquired with the LIG assets by AEP but will be sold separately. Jefferson Island Storage and Hub consists of two salt dome gas storage caverns with approximately nine billion Btu of storage capacity, and two 16-in pipelines. The high-deliverability system has eight interconnections, including LIG and Henry Hub via Sabine Pipeline. Jefferson Island Storage and Hub is also directly connected to Texas Gas Transmission, Columbia Gulf Transmission, Sea Robin Pipeline, Tennessee Gas Pipeline, Gulf South Pipeline and NGPL.
Finalization of the deal, which is subject to completion of certain conditions by AEP and Crosstex, is expected by mid-May. .
This story is published by courtesy of Energy Pipeline News: see http://anvilpub.com/energy_pipeline_news.htm.
