2011-06-20-2011-06-03
To acquire & operate Stanley condensate recovery plant in IL & Prairie Rose pipeline traversing 83 millions from IL to ND.
Morris, Ill-based Aux Sable Liquid Products LP, Enbridge Inc., Calgary, (Toronto, NYSE: ENB), Veresen Inc., Calgary, (Toronto: VSN) and Williams Partners LP (NYSE: WPZ) Tulsa, Okla., have reported that Sable NGL LLC, an affiliate of Aux Sable, has executed an agreement with a subsidiary of EOG Resources Inc., Houston, (NYSE: EOG) to purchase and operate the Stanley condensate recovery plant and the Prairie Rose pipeline for US$185 million.
The Prairie Rose pipeline connects the Stanley plant to the Alliance pipeline, which delivers high energy dense phase gas to Aux Sable's Channahon, Ill., plant for processing.
The Stanley plant commenced operation in February 2010 and will have a capacity of 80 million cubic feet per day when a current expansion is completed in June 2011. The plant removes the heavier hydrocarbon compounds while leaving the majority of the natural gas liquids in the rich gas delivered into the Prairie Rose Pipeline.
The 12-inch diameter, 83-mile Prairie Rose Pipeline also commenced operation in February 2010 and gathers gas from the Stanley Plant and other sources for delivery into the Alliance pipeline system at Bantry, N.D. The pipeline has an estimated capacity of 110 million cubic feet per day and can be easily expanded to meet additional demand.
"This acquisition represents a significant step forward in the pursuit of our strategic growth objectives in the Bakken area, as it provides key infrastructure assets that will lead to increased deliveries of liquids-rich natural gas to our Channahon facilities," says W.J. (Bill) McAdam, president and chief executive of Aux Sable. "With this acquisition, Aux Sable will be able to directly engage in and expand its role as a provider of value-added gathering and processing of natural gas and natural gas liquids from the Bakken play."
"As the largest crude oil producer in the North Dakota Bakken, EOG constructed these facilities when there was little infrastructure in the basin," says Ray L. Ingle, president of EOG's Pecan Pipeline (North Dakota) Inc. subsidiary. "We believe the time is right to sell these assets to an organization that specializes in gathering and processing, allowing us to focus on our core exploration and production activities in the region. We are pleased that Aux Sable recognized the value of both the Stanley plant and the Prairie Rose pipeline and are confident that under their management these facilities will benefit all operators in this part of North Dakota."
Aux Sable and Sable NGL are owned by Enbridge (42.7% equity interest), Veresen (42.7% equity interest) and Williams Partners (14.6% equity interest). Enbridge and Veresen each own a 50% interest in the Alliance Pipeline.
"We are pleased with this investment in that it bolsters our already strong position in the Bakken, one of the most prolific energy plays in North America," says Al Monaco, Enbridge president, gas pipelines, green energy and international. "The Pecan natural gas infrastructure increases the accessibility of the Alliance gas pipeline to Bakken-area producers and draws additional liquids-rich gas to the Aux Sable NGL fractionation plant near Chicago. The investment complements Enbridge's existing Bakken liquids pipeline systems in North Dakota and Saskatchewan."
The deal is expected to close in July.