US-based Regency Energy Partners has announced its plan to buy Southern Union Gathering Company from Southern Union Company for $1.5bn.
The Southern Union Gathering Company owns Southern Union Gas Services (SUGS) and the acquisition will add SUGS assets to Regency’s operations.
The acquisition is expected to increase Regency’s present in liquids-rich Permian basin.
Regency Energy Partners president and chief executive Mike Bradley said that the deal is a part of the company’s strategic plan to expand in the Permian Basin.
"The integration of the SUGS assets with our existing operations will position Regency with a broad Permian Basin gathering and processing footprint," Bradley added.
"The combined system is expected to provide significant synergies, increase efficiencies on our current system, improve the flexibility of our gathering and processing operations and enhance services for our customers.
"We also expect this acquisition will be neutral to slightly accretive in 2013 and to enhance our outlook for long-term distribution growth."
As a part of the deal, Regency will buy 5,600 miles of gathering system and about 500 million cubic feet per day (MMcf/d) of natural gas and natural gas liquids processing and treating facilities in west Texas and New Mexico.
In addition, the company will purchase SUGS’ currently under construction 200 MMcf/d Red Bluff processing plant and its associated treating facilities which are expected to begin services in the second quarter of the year.
The firm will also acquire an additional 200 MMcf/d cryogenic processing plant with associated treating which are currently under the planning stage and are anticipated to be in service in mid-to-late 2014.
Regency Energy Partners focuses on gathering, treating, processing, compressing, and transporting natural gas and natural gas liquids.