Morgan Stanley Acquires Interest In Southern Star

Transaction Type
Sellers
Buyers
Announce Date
Post Date
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Description

Morgan Stanley Infrastructure Partners Buys Southern Star Central Corp. For Undisclosed Sum.

Morgan Stanley Infrastructure, the dedicated infrastructure investing platform of Morgan Stanley Investment Management, announced that Morgan Stanley Infrastructure Partners (MSIP) has increased its ownership stake to 100 percent of the Common Equity of Southern Star Central Corp., parent company of Southern Star Central Gas Pipeline.

MSIP, a $4 billion global infrastructure fund, originally acquired a 40 percent economic stake with 50 percent governance rights in Southern Star in March 2010.

Southern Star is the primary gas transmission and natural gas storage facility provider for several major U.S. Midwest cities and power generation providers. Southern Star serves metropolitan areas in Missouri (Kansas City, St. Louis, Springfield, St. Joseph and Joplin), Kansas (Wichita, Kansas City, Topeka and Lawrence) and Oklahoma.

Southern Star receives gas supplies from major producing regions, including the Hugoton, Anadarko and Rocky Mountain basins. The system has 23 interconnections with other major interstate and intrastate pipelines, allowing its customers to source from additional producing basins, including the San Juan and Permian basins.

As a regulated asset supplying crucial services to a fully contracted customer base, Southern Star is a “core” infrastructure asset. The system consists of approximately 6,000 miles of mainline and branch transmission pipelines, with 2.4 billion cubic feet (Bcf) per day of mainline delivery capacity. In addition, the company’s extensive storage network of eight underground storage fields contains total working capacity of approximately 47 Bcf, with aggregate delivery capacity of approximately 1.3 Bcf per day.

Completion of the transaction is subject to certain standard conditions, including expiration or termination of the Hart-Scott-Rodino antitrust review period and reaffirmation of credit ratings of certain outstanding bonds. The seller received a limited amount of preferred equity. Other terms of the transaction were not disclosed.