CenterPoint, OGE, ArcLight Finalize Partnership
Closed on the formation of the partnership including interstate pipelines, field services, and midstream businesses.
CenterPoint Energy Inc. (NYSE: CNP), OGE Energy Corp. (NYSE: OGE) and ArcLight Capital Partners LLC closed on the formation of the previously announced partnership.
The partnership includes CenterPoint Energy's interstate pipelines and field services businesses and the midstream business of Enogex LLC. The partnership will be managed by a general partner whose governance will be shared by CenterPoint Energy and OGE on a 50/50 basis.
The companies plan for an initial public offering in the form of a public master limited partnership, said Pete Delaney, OGE’s chairman, president and CEO, in the release.
The partnership has combined assets of nearly US $11 billion. It owns and operates 8,400 miles of interstate pipelines with nearly 9 billion cubic feet per day of transport capacity and nearly 2,300 miles of intrastate pipelines. It also has more than 11,000 miles of gathering lines, which in 2012 moved nearly 4 billion cubic feet of natural gas per day. Additionally, it has more than 90 billion cubic feet of natural gas storage capacity and 11 major processing plants with nearly 2 billion cubic feet per day of inlet capacity.
CenterPoint Energy, OGE Energy and ArcLight hold 58.3%, 28.5% and 13.2% limited partner interests in the partnership, respectively. CenterPoint Energy and OGE Energy also will own 40% and 60% interests, respectively, in any incentive distribution rights held by the general partner.
In connection with the formation of the partnership, CenterPoint Energy has designated David M. McClanahan, Centerpoint’s president and CEO, and Gary L. Whitlock, Centerpoint’s executive vice president and chief financial officer, and OGE has designated Delaney and Sean Trauschke, OGE’s vice president and chief financial officer, as their initial representatives on the board of directors of the general partner of the partnership.
While the partnership's leadership team is being assembled, CenterPoint Energy's C. Gregory Harper, senior vice president and group president of midstream operations, and Enogex's Keith Mitchell, president, will continue to be responsible for each company's respective midstream operations and will work closely together to capture partnership opportunities.
In connection with the closing, the partnership (i) entered into a US $1.05 billion three-year senior unsecured term loan facility, (ii) repaid US $1.05 billion of intercompany indebtedness owed to CenterPoint Energy's wholly owned subsidiary, CenterPoint Energy Resources Corp., and (iii) entered into a US $1.4 billion senior unsecured revolving credit facility.
CenterPoint Energy Inc. operates as a public utility holding company in the US. The company is headquartered in Houston.
OGE Energy Corp. operates as an energy services provider that offers physical delivery and related services for electricity and natural gas primarily in the south central US. The company is based in Oklahoma City.
ArcLight Capital Partners LLC is an energy-focused investment firm headquartered in Boston.