Tulsa’s NGL Energy Partners LLP announced Tuesday it has wrapped up the $300 million sale of its 50% interest in the Glass Mountain Pipeline LLC. SemGroup Corporation and NGL had been in partnership in ownership of the 215-mile intrastate line.
The purchase was made by a fund managed by BlackRock Real Assets in partnership with Navigator Energy Services. NGL indicated it will use the $300 million to repay part of its outstanding indebtedness prior to Dec. 31, 2017.
The line delivers crude oil from the Mississippi Lime and Granite Wash plays in northwestern Oklahoma to Cushing. Work had been underway on a 44-mile pipeline extension of the line with completion set for this year. It was expected to be fully operational in the first quarter of 2018. The extension would help deliver oil from the STACK/Merge resource play.
Once the extension is finished, the system would have a pipeline capacity of nearly 210,000 barrels of oil a day.
“The closing of the Glass Mountain sale prior to end of the quarter will allow us to reduce our indebtedness and improve our leverage for our fiscal third quarter financials,” said Trey Karlovich, Executive Vice President and Chief Financial Officer of NGL. “We are continuing to focus on strengthening our balance sheet through the reduction of leverage and improving our liquidity, credit profile and distribution coverage as we move the Partnership forward.”
Deutsche Bank Securities Inc. served as exclusive financial advisor to NGL. McGrath North served as NGL’s legal counsel.
Morgan Stanley served as exclusive financial advisor to BlackRock Real Assets. Simpson Thacher & Bartlett served as BlackRock Real Assets’ legal counsel.
