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.
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.
Kinder 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.
