Atlas Pipeline to buy Teak Midstream
Atlas Pipeline Partners LP has agreed to buy Eagle Ford shale natural gas gathering and processing company Teak Midstream LLC.
Atlas Pipeline Partners LP has agreed to buy Eagle Ford shale natural gas gathering and processing company Teak Midstream LLC. Assets being acquired include Teak’s 200 MMcfd Silver Oak I cryogenic processing plant, 265 miles of 20-24 in. OD high-pressure rich gas gathering lines with 750 MMcfd, and a second 200 MMcfd cryogenic processing plant Silver Oak II, expected to be delivered to the partnership for installation in May and enter service first-quarter 2014. Atlas will also acquire 275 miles of low-pressure gathering lines as part of the deal.
Atlas expects further expansion of the acquired Eagle Ford assets beyond 2014, including the potential to add a third 200 MMcfd processing facility and additional gathering pipelines. Atlas sees the potential to eventually grow the complex to more than triple its current size.
Atlas will also acquire a 50-75% interest in various joint venture agreements between Teak and TexStar Midstream Services LP. It anticipates becoming the operator of these assets, which include 235 miles of rich gas gathering, header, and residue pipelines, 3 miles of NGL pipeline, and a co-gen facility, which will produce power for the Silver Oak complex as well as sell power to third-parties and back to the grid during peak season.
Atlas will spend $1 billion cash on Teak and expects the sale to close later this quarter subject to regulatory approval and customary conditions. Atlas expects total capital expenditures associated with the build-out of Silver Oak II and other projects over the next year to total about $100 million.
Atlas late last year acquired Cardinal Midstream LLC, active in the Woodford Arkoma basin (OGJ Online, Dec. 5, 2012).
Contact Christopher E. Smith at firstname.lastname@example.org.