SemGroup Energy Partners Acquires Pipeline From SemCrude
Posted on: Tuesday, 13 May 2008, 06:00 CDT
SemGroup Energy Partners has acquired the Eagle North Pipeline System, a 130-mile, eight-inch pipeline that originates in Ardmore and terminates in Drumright, Oklahoma, from SemCrude for $45 million.
SemGroup Energy Partners (SGLP) expects to invest up to an additional $3.5 million to convert the pipeline to a crude oil pipeline and to construct a 10-mile, six-inch pipeline from Drumright to Cushing, Oklahoma.
In connection with the Eagle North Pipeline System (ENPS) acquisition, SGLP will amend its current throughput agreement with SemCrude and SemGroup whereby SemCrude will commit to transport a minimum number of barrels on the ENPS and make minimum take-or-pay payments for the term of the throughput agreement. In addition to SemCrude, SGLP anticipates replacing up to 50% of SemCrude's initial commitment with other third-party barrels once the ENPS is operational.
Kevin Foxx, president and CEO of SemGroup Energy Partners, said: "This expansion of SGLP's asset base will provide crude oil producers an important link to the Cushing Interchange. It is expected to be accretive to unitholders beginning with our first quarter of 2009 distribution."
Source: Datamonitor
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