EnLink to buy Coronado Midstream for $600m

EnLink Midstream Partners and EnLink Midstream (together EnLink) have agreed to acquire Coronado Midstream for about $600m.

Coronado Midstream owns natural gas gathering and processing facilities in the Permian Basin and operates three cryogenic gas processing plants and a gas gathering system in the North Midland Basin.

The company also operates about 270 miles of gathering pipelines, 175 million cubic feet per day (MMcf/d) of processing capacity and 35,000 horsepower of compression.

Construction of a further 100 MMcf/d of processing capacity and gathering system expansions of the Coronado system are presently in progress.

EnLink aims to link the Coronado system with its Bearkat system to create a multi-county gas gathering and processing system.

EnLink president and chief executive officer Barry Davis said: "The Coronado assets are located in the core of the North Midland Basin and are supported by the region’s most focused and active producers.

"By combining Coronado with our recent LPC acquisition and our existing footprint, we have the opportunity to create tremendous value for our producer customers by linking our gas gathering, processing and crude oil logistics operations to provide a full-service midstream solution."

The increased activity around Coronado’s system is expected to generate significant accretion in EnLink’s distributable cash flow per unit over the next few years.

EnLink expects its total investment will be about seven to eight times Coronado’s adjusted EBITDA depending on the commodity prices recovery and an increase in producer activity with expected further capital investments of $400m to $600m.

Dallas-based EnLink Midstream’s assets include about 8,800 miles of gathering and transportation pipelines, 13 processing plants, seven fractionators, barge and rail terminals, product storage facilities, brine disposal wells and a crude oil trucking fleet.

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Image: EnLink Midstream’s asset footprint in West Texas. Photo: Courtesy of Business Wire.