Major Propane Assets Change Hands in $1.93B Deal

(image: energytransfer.com; ldhenergy.com)

A large piece of the machinery that gets propane from the ground to the marketplace — including pipeline, natural gas liquids (NGLs) storage and processing plants — changed hands yesterday in a deal worth about $1.93 billion dollars.

The buyer is a joint venture between Energy Transfer Partners (which operates Heritage Propane) and Regency Energy Partners. The seller is Louis Dreyfus Highbridge Energy.

LDH hands off properties that are centered around the propane hub in Mont Belvieu, Tex. These assets include its 1,066-mile West Texas Pipeline, according to a press release on the sale. And though the official announcement is vague on what else is included in the package, ETP and Regency also appear to pick up LDH’s fractionation operations in Texas and Louisiana, plus salt cavern storage with a capacity for 43-million barrels of NGLs.

“We see a number of exciting growth opportunities for these assets, which will allow both partnerships to compete in a new business platform of the midstream value chain, add downstream capabilities and capitalize on favorable NGL market fundamentals,” says the Regency president and CEO in the release.

ETP put in $1.35 billion for a 70-percent stake. Regency put in $578 million for a 30-percent stake.

Further reading: The Bloomberg story and The New York Times story.