American Midstream Partners has signed an agreement with Enterprise Products Partners, which enables it the option to acquire a stake of 25% in the latter’s natural gas processing facility in Pascagoula, Mississippi.
Image: American Midstream to acquire 25% stake in Enterprise’s Pascagoula natural gas processing facility. Photo: courtesy of supakitmod/ FreeDigitalPhotos.net.
The parties did not reveal the financial aspects of the deal.
However, the purchase option that American Midstream Partners will be subject to certain conditions. Included in these is completion of modifications by the company to certain facilities on its High Point pipeline system in the US Gulf of Mexico to enable it to deliver natural gas volumes to the Pascagoula natural gas processing facility.
Currently, the High Point pipeline system transports offshore natural gas production to the Enterprise-operated Toca Gas Plant located in St. Bernard Parish, Louisiana.
The firms said that due to the pending modifications to the High Point facilities, the owners of the Toca Gas Plant have voted to stop its operations.
Enterprise said that along with other Toca plant owners, it anticipates to realize significant operating expense savings from idling the gas processing plant and using existing processing capacity at the more efficient Pascagoula natural gas processing facility.
Enterprise said that the Toca gas plant customers will have the option to get into similar processing arrangements with the Pascagoula plant. This option is expected to offer the customers higher netbacks owing to enhanced natural gas liquid (NGL) recoveries and lowered energy costs, said the companies.
American Midstream Partners president and CEO Lynn Bourdon III said: “This agreement further illustrates how strategically positioned midstream companies can find an innovative approach to create a stronger and more reliable processing option for our customers. We appreciate the opportunity to work with a high-quality company such as Enterprise and partner in this solution.”
The Pascagoula natural gas processing facility plant, which features three trains with about 1.5 billion cubic feet per day of capacity, was acquired by Enterprise from BP during the first quarter of 2016.