High Point Gas Transmission has agreed to buy about 621 miles of onshore and offshore natural gas pipeline assets in Louisiana from Southern Natural Gas, it said Friday in a statement.
High Point Gas, a partnership between an affiliate of ArcLight Capital Partners and High Point Energy, did not disclose financial terms of the deal.
The sale involves Southern Natural's network south of its Toca compressor station, which is south of New Orleans and brings in gas from the Gulf of Mexico. The deal also also includes four platforms, about 68 active receipt points and 25 active delivery points, High Point Gas said.
The sale requires US Federal Energy Regulatory Commission approval, and the companies expect to close the deal in 2012.
Energy investment firm ArcLight and Houston-based midstream energy company High Point Energy also agreed to contribute "other related pipeline assets" to High Point Gas, and further expand the business by partnering with local producers to develop and maintain the infrastructure, and by completing other acquisitions and capital projects.
Richard Wheatley, spokesman for Southern Natural parent El Paso Corp., said the sale allows his company to sharpen its focus on core work, including onshore pipeline expansions and upgrades in the Northeast. The company has "adequate access to onshore supplies," particularly with the completion of recent projects such as the Southeast Supply Header, he said.
The pipeline assets being sold to High Point Gas, on the other hand, bring in offshore gas from the Gulf.
