After closing, ETP will own 100% of the general partner of PennTex Midstream, all of its incentive distribution rights, and 65% of the total limited partner interests in PennTex Midstream. The payment comprises 50% ETP common units issued directly to sellers and 50% cash. The deal is expected to close in the fourth quarter.
PennTex Midstream owns midstream assets in the Terryville complex of northern Louisiana consisting of a rich natural gas gathering system, two cryogenic natural gas processing plants totaling 400 MMcfd of capacity, and residue gas and NGL pipelines. ETP says the assets complement its existing midstream footprint in the region.
PennTex Midstream’s primary customer is Range Resources Corp. In addition to long-term fee-based gathering and processing agreements that include minimum volume commitments, PennTex Midstream has exclusive right to build all midstream infrastructure for Range within an area of mutual interest (AMI) in northern Louisiana, and provide midstream services to support Range’s current and future production on its operated acreage within the AMI.