American Midstream to acquire interests in Gulf of Mexico assets and Delta House for $225m

American Midstream Partners will acquire interests in the Gulf of Mexico midstream infrastructure and incremental ownership in Delta House, US, from the ArcLight affiliate for about $225m.

The company acquired the FERC-regulated Destin natural gas pipeline, 161-mile Tri-States and 30-mile Wilprise natural gas liquids (NGL) pipelines that together serve as a key transport system for rich-gas production from the Eastern Gulf of Mexico.

These assets include about 1.2 billion cubic feet per day (Bcf/d) of natural gas gathering and transport capacity.

The 255-mile Destin pipeline is supplied by Delta House and various other large Eastern Gulf of Mexico producing fields.

American Midstream will individually acquire a majority interest in crude, natural gas, and salt water onshore and offshore pipelines in the Gulf of Mexico.

The acquisition will also include the Henry Gas Gathering System from Chevron.

Furthermore, an additional 1% interest in Delta House will be acquired from an affiliate of the company’s general partner.

With this, the company’s total ownership in Delta House increased to about 14%.

During the second quarter of 2016, American Midstream also proposes to acquire interest in another offshore natural gas pipeline from an affiliate of its general partner.

American Midstream Partners chairman, president and CEO Lynn Bourdon said: "Our combined interests in the Destin and High Point gathering and transmission systems cover more than 10,000 square miles of active production in the Gulf.

"In addition, the onshore segment of Destin extends our gas transmission footprint into an active region serving the southeast marketplace.

"The additional pipeline interests increase our size and scale through incremental fee-based cash flows supported primarily by take-or-pay contracts and life-of-lease dedications."