Enterprise Products Partners LP, the US' second-largest publicly traded midstream energy partnership, says it plans to expand its Gulf Coast midstream system with a recent acquisition. Enterprise agreed to buy Acadian Gas LLC, a unit of Shell Oil Co. affiliate Coral Energy LLC, Houston, for $226 million cash.
The move allows Enterprise to meld the Acadian assets�which include the Acadian, Cypress, and Evangeline natural gas pipeline systems in South Louisiana�with its Gulf Coast gas processing and natural gas liquids (NGL) fractionation, pipeline, and storage system.
On Monday, Enterprise said the acquisition would give it a base for building and acquiring additional natural gas pipeline assets that will boost the value of its NGL assets.
The purchase is expected to be "immediately accretive" to earnings and cash flow, said the company.
"This acquisition is strategic because it expands our platform of fee-based midstream energy services to include natural gas transportation and storage," said O.S. "Dub" Andras, president and CEO of Enterprise. "We believe there will be many growth and investment opportunities in natural gas and NGL infrastructure as producers respond to increasing demands for natural gas to fuel power generation."
The three systems include more than 1,000 miles of pipeline and more than one bcfd of capacity. The system includes a leased 3.4-bcf capacity natural gas storage facility at Napoleonville, La.
The systems have interconnects with 12 interstate pipelines and four intrastate pipelines, plus a bi-directional interconnect with the largest US natural gas marketplace at the Henry Hub, said Enterprise.
Enterprise anticipates closing the deal during fourth quarter 2000.