Midcoast Energy Partners, L.P. (NYSE: MEP) (“MEP” or “Midcoast Partners”) is entering the emerging Eaglebine shale play in East Texas through two key transactions totaling approximately $160 million: a capital expansion project for the construction of a new natural gas pipeline gathering header; and the acquisition of premier midstream assets.
MEP has executed agreements with Burk Royalty Co., LTD and SEM Operating Company LLC, a subsidiary of Sequitur Energy Resources, LLC to construct, own and operate the Ghost Chili Lateral pipeline and associated facilities in Houston County, Texas. The initial facilities are projected to be placed in service by late-2015, with the Ghost Chili Lateral expected to be in full service by mid-2016.
Midcoast has also executed an agreement with New Gulf Resources, LLC (“NGR”) to purchase NGR’s Midstream Business in Leon, Madison and Grimes Counties, Texas. The acquisition consists of a natural gas gathering system that is currently in operations moving equity and third party production. The collective Eaglebine investments will be undertaken by Midcoast Operating, L.P., and will be jointly funded 51.6 percent by MEP and 48.4 percent by Enbridge Energy Partners, L.P. (NYSE: EEP).