QEP Midstream Partners LP (NYSE: QEPM) (the Partnership) has entered into a purchase and sale agreement to acquire 40% of the outstanding membership interest in Green River Processing LLC for $230 million in cash from QEP Field Services Co., a wholly owned subsidiary of QEP Resources Inc. (NYSE: QEP).
This transaction represents the Partnership's first acquisition following its initial public offering in August 2013. The acquisition is expected to be immediately accretive to the Partnership's distributable cash flow per unit. The transaction is expected to close on or about July 1. The Partnership will finance the acquisition with borrowings under its revolving credit facility.
At closing, Green River Processing will own the Blacks Fork processing complex and the Emigrant Trail processing plant located in southwest Wyoming. Green River Processing will own four processing plants with total processing capacity of 890 MMcf per day, natural gas liquids (NGLs) fractionation capacity of 15,000 bbl per day, interconnects to six interstate natural gas pipelines, and direct pipeline access to the Mont Belvieu and Conway NGL markets. In 2013, total inlet volumes for Green River Processing were 201 million MMBtu, of which 65% were processed under fee-based processing agreements and 35% were processed under keep-whole processing agreements.
The Blacks Fork complex contains three processing plants with up to 505 MMcf per day of cryogenic processing capacity and a 330 MMcf per day Joule-Thomson processing plant. In addition, the complex has 15,000 bbl per day of fractionation capacity and associated truck and rail loading facilities, which allow Green River Processing to sell purity products into what are often premium-priced local and regional NGL markets. The majority of gas processed at the Blacks Forks complex is produced in the Pinedale Anticline which is 100 miles north of the complex.
The Emigrant Trail processing plant, located 10 miles south of the Blacks Fork complex, consists of one cryogenic gas processing train with inlet capacity of 55 MMcf per day. The plant receives the majority of its gas from various gas fields along the Moxa Arch, including Church Buttes, located in the Green River Basin of western Wyoming. The inlets of the Emigrant Trail plant and the Blacks Fork Complex are interconnected allowing raw gas to be processed at either or both facilities.
The terms of the acquisition were approved by the board of directors of the General Partner of the Partnership, based on the approval and recommendation of the Conflicts Committee, which is made up entirely of independent directors. The Conflicts Committee was advised by Tudor, Pickering, Holt & Co. regarding financial matters and by Andrews Kurth LLP regarding legal matters.