JP Energy acquires Southern, signs interconnection agreement with Magellan

JP Energy Partners LP (NYSE: JPEP) has signed a definitive agreement to acquire the assets of Southern Propane Inc. (a Houston-based industrial and commercial propane distribution and logistics company) for $14.9 million, and has also executed an interconnection agreement with an affiliate of Magellan Midstream Partners LP to connect its Silver Dollar Pipeline System to Magellan’s Longhorn pipeline at Barnhart Terminal in Crockett County, Texas. 

The acquisition is expected to close before the end of the second quarter of 2015 and will be funded through the use of cash from JP Energy’s revolving credit facility and the issuance of approximately 267,000 JPEP units. The acquisition is expected to be immediately accretive to distributable cash flow per unit and is an addition to the company’s existing Gulf Coast NGL assets and operations.

The interconnection agreement provides producers with a third takeaway option from the Silver Dollar Pipeline System and direct access from the core of the Midland Basin to Houston end markets. The connection is expected to be in service by the third quarter of 2015.

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