PAA completes acquisition of South Pines natural gas storage facility

Source: PAA Natural Gas Storage

PAA Natural Gas Storage, L.P. (NYSE: PNG) has completed the previously announced acquisition of SG Resources Mississippi, LLC, which owns the Southern Pines Energy Center natural gas storage facility. The purchase price, which is subject to post-closing adjustments, was approximately $750 million. 

Funding was provided pursuant to previously disclosed equity and debt arrangements. Approximately $600 million of equity financing was provided by the sale in a private placement of 17.4 million PNG common units to third-party purchasers and 10.2 million PNG common units to Plains All American Pipeline, L.P. (NYSE: PAA) as well as PAA’s proportionate general partner contribution. The debt financing consisted of PNG selling a three-year, $200 million note to PAA at an interest rate of 5.25% per annum. 

Pending investment in expansion activities at Southern Pines, excess proceeds will be used to reduce PNG’s existing indebtedness. Giving effect to these transactions, PAA holds an aggregate 64% equity ownership in PNG, including 100% of PNG’s general partner and its incentive distribution rights.

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