Sanchez Midstream to divest non-core assets in Texas, US

Sanchez Midstream Partners has signed an agreement to divest its non-core, non-operated production assets located in Texas to an undisclosed buyer.

The proposed sale is valued around $6.3m and is in line with the company’s strategy of focusing on midstream activities currently concentrated in the Western Eagle Ford, South Texas.

The latest development follows the company previously signing an agreement to offload its remaining operated Oklahoma production assets for $5.5m.

Sanchez Midstream Partners general partner CEO Gerry Willinger said: “The sale of non-core production assets expected this quarter comes as we continue to advance our midstream strategy in South Texas.

“In keeping with that strategy, we are pleased to report that the Raptor Gas Processing Facility, a 50% joint venture with Targa Resources, successfully completed testing and start-up in June and is now fully operational.”

The facility began receiving deliveries from the Carnero gathering pipeline in June.

With a natural gas processing capacity of 200 million cubic feet equivalent per day (mmcfepd), it is scheduled for expansion to 260mmcfepd by the end of this year's third quarter. 

Meanwhile, construction related to the first phase of expansion of Sanchez’s wholly owned dry gas Raptor SECO Pipeline is close to completion.

Output from the Raptor gas processing facility is expected to be delivered through the pipeline to natural gas markets in South Texas, as of later this month. 

The latest transaction and the one related to Oklahoma production assets are slated for completion in the third quarter of this year.