US based pipeline transportation and energy storage company Kinder Morgan Energy Partners (KMEP) has signed an agreement with Petrohawk Energy Corporation to purchase Petrohawk's 50% stake in KinderHawk Field Services (KinderHawk) for $855m.
KMEP will assume $65m in debt in the deal which is expected to close in the third quarter of the year, following which KMEP will own 100% of KinderHawk.
KinderHawk is a provider of natural gas gathering and treating services in Haynesville Shale, located in northwest Louisiana and East Texas in the US.
The company said it will also acquire 25% stake in Petrohawk’s natural gas gathering and treating business in the Eagle Ford Shale in the US.
KMEP will invest $220m to build a new crude/condensate pipeline with a capacity of approximately 300,000 barrels per day (bpd), which is expected to be in service in the second quarter of 2012.
The pipeline will initially transport 50,000 bpd of condensate for Petrohawk from its production area in the Eagle Ford to the Houston Ship Channel.
Petrohawk will own 75% of the Eagle Ford joint venture, which will include 280 miles of gas gathering lines and 112 miles of gas condensate gathering lines in the Hawkville and Black Hawk fields.
The joint venture assets will be in service by year end.
KMEP’s crude/condensate pipeline will consist of about 61 miles of new-build construction and 109 miles of existing natural gas pipeline that is being converted.