El Paso acquires gas processing plant, offshore gathering interests

El Paso Energy Partners LP has completed two acquisitions worth $284 million. El Paso paid $198.5 million for the Chaco natural gas processing facility in Chaco, NM. It also paid $85 million, in the purchase price and to reduce the debt, of Deepwater Holdings LLC.

Oct. 18, 2001

2 min read

By the OGJ Online Staff

HOUSTON, Oct. 18 -- El Paso Energy Partners LP has completed two acquisitions worth $284 million. It bought a gas processing facility in Chaco, NM, and Deepwater Holdings, which has two offshore gathering systems.

El Paso paid $198.5 million to a consortium of financial institutions for the Chaco gas processing facility, a cryogenic processing facility in northern New Mexico's San Juan basin. It is connected to El Paso Field Services' gas gathering system.

Chaco, which can process 700,000 decatherms/day of gas and produce 50,000 b/d of liquids, is the third-largest gas processing plant in the US, El Paso said.

El Paso Energy Partners maintains an existing lease with El Paso Field Services, a business unit of El Paso Corp. It has entered into a 20-year, fixed-rate tolling agreement to process gas for El Paso Field Services.

The company has also completed the purchase of pipeline company Deepwater Holdings LLC, which owns the High Island Offshore System and the East Breaks Gathering System.

Previously, El Paso Energy Partners operated Deepwater Holdings with 50% interest. It acquired the remaining 50% interest from a subsidiary of El Paso Corp. and retired project debt for a total transaction value of $85 million.

El Paso Energy Partners LP is a publicly owned master limited partnership. It owns many midstream assets, including five offshore natural gas and oil pipelines. El Paso Corp. owns 28% of El Paso Energy Partners.