Enterprise, American Midstream Enter Agreement for Processing Plant Stake

Enterprise Products Partners LP (Houston) and Houston-based American Midstream Partners LP have entered into an agreement under which American Midstream may elect to purchase a 25% interest in Enterprise’s Pascagoula natural gas processing plant. The purchase option is subject to conditions, including American’s completing modifications to facilities on its High Point pipeline system that will provide incremental natural gas volumes with access to the Pascagoula plant.

American Midstream’s High Point pipeline system currently delivers offshore natural gas production to the Enterprise-operated Toca Gas Plant in St. Bernard Parish, La. for processing services. As the result of the pending modifications to the High Point facilities, the Toca plant owners have voted to discontinue operations.

Enterprise, along with other Toca plant owners, expect to realize significant operating expense savings from idling Toca and utilizing existing processing capacity at the more efficient Pascagoula plant. Toca customers will have the option to enter into similar processing arrangements with Pascagoula, which should provide them higher netbacks in the form of improved NGL recoveries and reduced energy costs.

“We are pleased to work with American Midstream to find a creative win-win solution for our customers and partners in the Toca plant,” said Brad Motal, senior vice president, natural gas assets and marketing, of Enterprise Products’ general partner.

“This agreement further illustrates how strategically positioned midstream companies can find an innovative approach to create a stronger and more reliable processing option for our customers,” added Lynn Bourdon III, president and CEO of American Midstream Partners. “We appreciate the opportunity to work with a high-quality company such as Enterprise and partner in this solution.”

(SOURCE: The Weekly Propane Newsletter, September 4, 2018)