Southcross Energy Partners LP (NYSE:SXE) has acquired natural gas pipelines near Corpus Christi, Texas, along with contracts related to those pipelines. The purchase price is approximately $40 million in cash, and funds for the acquisition were drawn from Southcross’ existing credit facility. The pipelines were acquired from Onyx Midstream LP and Onyx Pipeline Co.
The pipelines, which range from 12 inches to 24 inches in diameter, transport natural gas to two power plants in Nueces County, Texas, under fixed-fee contracts that extend through 2029. Total length of the pipelines is approximately 50 miles. Natural gas volumes through the pipelines averaged 97 million cubic feet per day during 2013. The transaction is expected to be accretive to Southcross’ distributable cash flow during 2014.
"We are expanding our platform with the acquisition of these pipelines," said David Biegler, chairman and CEO of Southcross’ general partner. "They complement our integrated midstream strategy of delivering products to end-use markets and customers and are significant additions to our pipelines in the Corpus Christi area.”