Tejas Power Corp. Acquires Natural Gas Gathering Systems in Texas and Gulf of Mexico

Strategic Insights -

Tejas Power Corp. has agreed to purchase 19 natural gas gathering systems onshore Texas and in the Gulf of Mexico from Seagull Energy Corp. and three other companies for $153.5 million. The acquisition includes a significant amount of pipeline infrastructure, with 226 miles of offshore pipeline and 238 miles of onshore pipeline. The total throughput of the acquired systems averaged 761.3 MMcfd in 1994, with 683 MMcfd coming from offshore systems and 78.3 MMcfd from onshore systems.

Key Takeaways:

  • Tejas Power Corp. is acquiring 19 natural gas gathering systems from Seagull Energy Corp. and three other companies for $153.5 million.
  • The acquisition includes 226 miles of offshore pipeline and 238 miles of onshore pipeline, with a combined throughput of 761.3 MMcfd in 1994.
  • The offshore systems consist of the Seagull Shoreline system, the Cavallo pipeline system, the Brazos Area gathering system, and the El Gordo system, with a combined throughput of 683 MMcfd in 1994.
  • The onshore systems, which are smaller, consist of 238 miles of pipeline moving 78.3 MMcfd.
  • The deal also includes the 250 MMcfd Matagorda gas plant and the 5,200 b/d Oyster Lake condensate-stabilization facility.
  • The purchase will boost Tejas' total offshore gathering system capacity to 333 miles of pipeline with 1.68 Bcfd of throughput capacity.
  • Seagull Energy Corp. will net about $100 million in proceeds from its stake in the systems and register an $83 million pretax gain in the third quarter.
  • The acquisition is a key step in Tejas's expansion into the natural gas gathering business.
  • The deal also highlights Tejas's ability to secure financing through new credit facilities set up with ING Capital Corp.

Statistics:

  • $153.5 million: The purchase price of the natural gas gathering systems.
  • 226 miles: The length of offshore pipeline.
  • 238 miles: The length of onshore pipeline.
  • 761.3 MMcfd: The total throughput of the acquired systems in 1994.
  • 683 MMcfd: The combined throughput of offshore systems in 1994.
  • 78.3 MMcfd: The throughput of onshore systems in 1994.
  • 250 MMcfd: The capacity of the Matagorda gas plant.
  • 5,200 b/d: The production capacity of the Oyster Lake condensate-stabilization facility.
  • 333 miles: The total length of offshore pipeline after the acquisition.
  • 1.68 Bcfd: The total throughput capacity of Tejas's offshore gathering systems after the acquisition.

Sources:

  • Tejas Power Corp. press release.
  • Seagull Energy Corp. press release.
  • Industry reports and publications.