Plains sells gas storage facilities along US Gulf Coast
US midstream company Plains All American has reached an agreement to sell natural gas storage facilities on the US Gulf Coast to Hartree Partners for $850mn, it said June 8.
Plains CEO Willi Chiang said the sale contributes to its divestment and debt reduction goals, while boosting free cash flow.
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“This is a win-win transaction for both parties,” he said. “Plains is exiting at an attractive valuation within a timeframe consistent with our expectations, while Hartree is receiving high-quality critical infrastructure in a strategic market.”
The assets in question can hold as much as 70bn ft3 of gas in nine caverns along the US Gulf Coast. Infrastructure includes header pipelines and compressors.
"We are attracted to the facilities' strategic location in the Gulf Coast and diverse mix of pipeline, utility and LNG customers,” said Hartree Partners co-founder Steve Semlitz. “Hartree looks forward to working with the existing management and operating teams to build upon their outstanding customer relationships and operating track record."
US natural gas is stored in depleted oil and gas fields, as well as in salt caverns along the US Gulf Coast.
Plains expects the transaction to close in the third quarter.