Azure Midstream has completed the acquisition of 100% of the equity interest in TGGT from Exco Resources and BG Group for $910m.
As part of the transaction, Energy Spectrum Partners, an affiliate of Tenaska Capital Management, contributed cash for an ownership stake in Azure.
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The East Texas Gathering (ETG) system, an asset managed by Tenaska Capital, is being contributed for additional ownership interest in a related deal.
Exco and BG will jointly own around 7% of Azure as partial consideration to the transaction.
By consolidating TGGT and ETG, Azure will operate over 1,300 miles of gathering pipelines that transfer natural gas from supply basins in North Louisiana and East Texas to more than 20 existing major intrastate and interstate pipelines in the region.
The pipelines have 2.7 billion cubic feet per day (bcfd) of treating capacity and a combined delivery capacity of around 4 bcfd.
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By GlobalDataAccording to Azure Midstream, the systems are gathering and delivering around 1.3 bcfd at present.
Energy Spectrum managing partner Jim Benson said that this is the second time that the company has worked with Tenaska Capital.
"Energy Spectrum is also extremely appreciative of many of our limited partners who have co-invested in Azure to round out the equity group, and we all look forward to building a sizable gas-gathering and processing business with the Azure team," Benson added.
Tenaska Capital managing director John O’Shea said: "This combination will give the producers on our ETG system, as well as those on the TGGT system, more market options for their gas, as well as potential for on-system processing as we complete our Fairway Processing Plant."
Image: Acquisition map of Azure Midstream. Photo: courtesy of PRNewsFoto/Azure Midstream Holdings LLC.
