By OGJ editors
HOUSTON, Apr. 15 -- Kinder Morgan Energy Partners has entered into a definitive agreement to purchase a 50% interest in Petrohawk Energy Corp.’s natural gas gathering and treating business in the Haynesville shale for $875 million in cash.
The transaction will create the largest gathering and midstream business in the Haynesville shale of northwest Louisiana. The assets consist of more than 170 miles of pipeline currently in service, which is expected to increase to about 375 miles of pipeline with projected throughput of over 800 MMcfd by yearend. The system’s amine treating plants have a projected capacity of 2,635 gpm by yearend.
Petrohawk will continue to operate the business during a short transition period, after which a new company, KinderHawk Field Services LLC, owned 50-50 by Petrohawk and KMEP, will assume operations. The joint venture has received a life of lease dedication to transport and treat all of Petrohawk’s operated Haynesville and Bossier shale production in Louisiana at agreed upon rates, as well as minimum volume commitments from Petrohawk for the first 5 years.
KinderHawk, to be staffed with personnel from both companies, will focus on providing firm service to third-party shippers. The venture ultimately is expected to have about 2 bcfd of mainline throughput capacity, which will make it one of the largest gathering and treating systems in the US.
Firms form KinderHawk JV for Haynesville shale operations
By OGJ editors