Crestwood Equity Partners LP and Brookfield Infrastructure Partners have completed the sale of a natural gas storage facility to Enbridge Inc. for $335 million, Crestwood said in its May 2 earnings report. (Source: Shutterstock.com)
Crestwood Equity Partners LP and Brookfield Infrastructure Partners have completed the sale of a natural gas storage facility to Enbridge Inc. for $335 million, Crestwood said in its May 2 earnings report.
On March 1, Canada’s Enbridge said it would acquire the Tres Palacios gas storage facility in Matagorda County, Texas. The salt cavern natural gas storage facility has a working gas capacity of 35 billion cubic feet across three storage caverns.
Crestwood said the sale closed April 3 and received $178 million for its 50% interest in Tres Palacios Gas Storage LLC. The proceeds will be used to repay Crestwood borrowings.
Crestwood ended the first quarter with approximately $3.3 billion of total debt outstanding, including $474 million drawn on its $1.75 billion revolving credit facility. Its consolidated leverage ratio of 4.2x will drop to pro forma for the Tres Palacios sale.
“We successfully closed the divestiture of Tres Palacios and used the sale proceeds to pay down debt and accelerate our leverage reduction,” said Robert G. Phillips, founder, chairman and CEO of Crestwood. “Pro forma for the divestiture, Crestwood’s leverage ratio is now at 4.0x, with line of sight to further deleveraging throughout the year via EBITDA growth and free cash flow allocation to debt pay down.”
Enbridge said on May 1 it had entered into a definitive agreement to acquire two more storage facilities in Canada from FortisBC Holdings Inc. for CA$400 million (US$295 million).
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