DCP Selling Wholesale Propane Business to NGL Energy Partners

NGL Energy Partners LP (Tulsa) and DCP Midstream LP (DCP; Denver) have executed a purchase and sale agreement under which DCP will convey its wholesale propane business to NGL Energy Partners. The wholesale business generally consists of seven natural gas liquids terminals in the eastern U.S.

Under the terms of the deal, NGL Energy will acquire 100% ownership of five propane rail terminals operated by Gas Supply Resources, a subsidiary of DCP, and a 50% ownership interest in a sixth propane rail terminal. The sale also includes an import/export terminal in Chesapeake, Va. with the capacity to load or unload ships from handy-size vessels to very large gas carriers.

“NGL is excited to acquire these well-operated, high-quality assets from DCP,” said Jeff Pinter, executive vice president of liquids at NGL Energy Partners. “The propane terminals complement NGL’s existing liquids portfolio and create additional opportunities for new and existing customers to supply their business. The Chesapeake asset provides strategic access to the water for imports and exports. Gas Supply Resources has an excel- lent reputation in the Northeast, and we look forward to inviting their talented employees to join the NGL team.”

“Gas Supply Resources has been a great asset for DCP, but has no interconnectivity with our otherwise integrated value chain of midstream services,” said Wouter van Kempen, chairman, president, and CEO of DCP Mid- stream. “This is an outstanding opportunity to streamline our assets and fund our 2019 strategic capital program.”

The transaction has been approved by appropriate governing bodies of both companies, but remains subject to satisfaction of specified closing conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

(SOURCE: The Weekly Propane Newsletter, February 11, 2019)