US-based Access Midstream Partners has signed an agreement with Chesapeake Energy to buy Chesapeake Midstream Operating, a wholly-owned subsidiary of Chesapeake Midstream Development, for $2.16bn in cash.
The acquisition will include natural gas gathering and processing assets in the Eagle Ford, Utica and Niobrara liquids-rich plays, as well as Access’ existing assets in the Haynesville and Marcellus dry gas plays.
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Both the companies have also agreed to extend Access’ exclusivity period related to Chesapeake’s remaining assets in the Mid-Continent region until 1 March 2013.
Access will get a transformational opportunity with the acquisition of midstream assets and will establish the company as the most important gathering and processing MLP in the country.
In addition, the acquisition will give the company significant and firm footprints in most of the key unconventional basins in the US.
It will also give immediate rights to take opportunities in key liquids-rich regions and to the processing and fractionation segments of the midstream value chain.
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By GlobalDataCorresponding with the completion of the transaction, Williams will acquire a 50% stake in Access and the company’s $34.5m subordinated limited partner units from Global Infrastructure Partners (GIP).
GIP and Williams have also signed an agreement to buy up to $1.16bn of additional limited partner interests, which also includes $350m paid in equity.
Access Midstream Partners CEO, J. Mike Stice, said that the acquisition will help the company to become the largest gathering and processing MLP in terms of invested capital and production volume.
"The extension of our services into gas processing, fractionation and NGL pipelines will enhance our ability to grow and deliver additional value to our unitholders going forward," added Stice.
"Our ability to leverage Williams’ deep midstream operational and development capabilities will significantly benefit our expanded operations and lead to new growth opportunities for years to come."
The transaction is expected to be complete by the end of 2012.
Image: Access Midstream Partners has signed an agreement to buy Chesapeake Midstream Operating, a wholly-owned subsidiary of Chesapeake Midstream Development, for $2.16bn in cash. Photo: courtesy of Access Midstream Partners
