Kinder Morgan has agreed to acquire a gas pipelines asset, STX Midstream, in South Texas, US, from NextEra Energy Partner for a purchase price of $1.81bn.
STX Midstream primarily comprises seven pipelines that supply natural gas to Mexico and municipalities and power producers in South Texas.
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The pipelines have a total transportation capacity of 4.9 billion cubic feet per day.
STX Midstream has a 90% stake in the NET Mexico pipeline. MGI Enterprises, an affiliate of Mexican state-owned petroleum company Pemex, owns the remaining 10% interest.
STX Midstream also owns and operates Eagle Ford Midstream, a 158-mile residue line connecting the Eagle Ford basin to the Agua Dulce Hub in Nueces County, Texas, as well as a 50% stake in Dos Caminos.
Dos Caminos, in which Howard Energy Partners (HEP) owns the other 50% stake, is a 62-mile pipeline that connects the existing midstream pipeline of HEP and facilities in Webb County, Texas, to Kinder Morgan’s new Eagle Ford pipeline.
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By GlobalDataKinder Morgan natural gas pipelines president Sital Mody said: “STX Midstream nicely complements our existing assets and will enable us to capture incremental opportunities serving LNG [liquefied natural gas], power generation, LDC customers and exports to Mexico.”
Due to be completed in the first half of 2024, the transaction is subject to receipt of Hart-Scott-Rodino anti-trust approval and customary closing conditions, among others.
Proceeds from the sale will be used to reduce the outstanding Texas pipeline portfolio’s project-related debt, complete the $1.1bn buyout remaining under the NEP Renewables II CEPF by June 2025 and reduce a portion of the outstanding corporate revolver loan.
