Kinder Morgan acquires Southcross pipelines in $76 million acquisition

A bankruptcy court judge has given approval for Houston’s Kinder Morgan Inc. to acquire a pipeline network owned by bankrupt Dallas-based Southcross Energy Partners LP in a $76 million deal.

The U.S. Bankruptcy Court for the District of Delaware signed off on the acquisition last month in an announcement made this week.

Other assets that Southcross Energy owns in Mississippi and Alabama will be acquired by Magnolia Infrastructure Holdings for $31.5 million. Magnolia is a portfolio company of Boston-based ArcLight Capital Partners.

Kinder Morgan is also close to completion of a $1.75 billion Gulf Coast Express pipeline which will transport natural gas out of the Permian Basin to a terminal near Corpus Christi.

It was in April when Southcross filed for bankrtupcy and listed assets of more than $610 million and total debts of $614.26 million. The company plans to reorganize after the sale of the pipelines according to its release.

“Following a comprehensive review of available alternatives and working closely with our lenders, we determined that the best path forward for our gathering and processing operations is to complete the reorganization process and emerge as a stronger, more profitable standalone business,” James Swent III, chairman, president and CEO of Southcross, said in the release. “Our facilities are well-positioned in the Eagle Ford Shale area, and we look forward to driving growth by safely providing customers with our complementary suite of gas gathering, processing, treating, fractionation and re-delivery of residue gas services. With the Court’s approval of our asset sales, along with this go-forward focus on our gathering and processing operations, we have made significant progress in our court-supervised process toward maximizing the value of our assets and achieving the best outcome for our stakeholders.”