DALLAS, Texas - Plains All American Pipeline LP (PAA) and its natural-gas unit PAA Natural Gas Storage LP (PNG) have agreed to acquire SG Resources Mississippi LLC's salt-cavern natural-gas storage facility for about $750 million.
PAA went public in April 2010.
The facility, called Southern Pines, went into operation in 2008 and has three caverns in operation, with a fourth under way. The facility ties into eight major natural-gas pipelines. The facility is fully contracted for the coming storage season, with an estimated 85percent and 70 percent of capacity booked for the following two seasons.
As a result of the acquisition, PAA expects to raise its annual distribution for the February payment to $1.38 a unit and end next year at $1.45 a unit- an increase of 7.4 percent from its current rate of $1.35 a unit.
PAA has arranged $800 million in financing, including $600 million of equity.
Plains All American will provide $338 million of equity, including a two percent general partner contribution. Plains also will provide $200 million in debt financing to PAA Natural Gas.