El Paso Corporation, North America's largest natural gas pipeline operator, has agreed to sell certain South Louisiana midstream entities to Crosstex Energy for $500 million.
The sale includes interests in the Eunice, Pelican, Riverside, Sabine Pass, and Blue Water processing and fractionation facilities. The assets to be acquired include 2 billion cubic feet per day (Bcf/d) of processing capacity, 66,000 barrels per day of fractionation capacity, 2.4 million barrels of underground storage, and 140 miles of liquids transport lines.
Once the sale is complete, which is forecast for the fourth quarter of 2005, El Paso expects to report a pre-tax gain of approximately $400 million. In addition to the current sale, El Paso is in the process of selling its interest in a processing plant in South Texas, which will conclude its midstream asset sales.
This transaction supports the company’s plan to reduce debt, net of cash, to approximately $15 billion by year-end 2005. Since its March 17, 2005 long- range plan update, the company has announced or closed approximately $1.2 billion of its targeted $1.2 billion to $1.6 billion of asset sales.