Bankruptcy court clears Kinder Morgan’s buy of Southcross pipeline network
Kinder Morgan Tejas Pipeline, a unit of U.S. energy company Kinder Morgan, has been approved as the buyer of certain natural gas pipeline assets owned by Southcross Energy.
The United States Bankruptcy Court for the District of Delaware approved the sale of the assets on October 22.
Under the sale agreement, Kinder Morgan will acquire Southcross Energy’s natural gas pipeline network in Corpus Christi for $76 million. The acquisition is expected to close in November.
Also, Magnolia Infrastructure Holdings will buy pipelines and related assets that Southcross Energy owns in Mississippi and Alabama for $31.5 million.
Kinder Morgan natural gas midstream president Sital Mody said: “We continue to focus on opportunities to increase our natural gas connectivity to meet LNG facilities, Gulf Coast power, industrial and petrochemical demand.
“These assets are a nice complement to our existing Texas portfolio of assets and allow for further connectivity on our Texas Intrastate system.”
It is worth noting that Southcross filed for bankruptcy protection in April. At the time, it was considering a number of paths forward, including the sale of some or all of the company.
Following the completion of the asset sales, Southcross will reorganize and focus on growing its substantial Texas gathering and processing operations. These operations include the Company’s Lancaster and Valley Wells facilities and the Lone Star, Woodsboro, and Bonnie View plants.
James Swent III, chairman, president, and CEO of Southcross, added: “Following a comprehensive review of available alternatives and working closely with our lenders, we determined that the best path forward for our gathering and processing operations is to complete the reorganization process and emerge as a stronger, more profitable standalone business.
“With the Court’s approval of our asset sales, along with this go-forward focus on our gathering and processing operations, we have made significant progress in our court-supervised process toward maximizing the value of our assets and achieving the best outcome for our stakeholders.“