Following hot on the heels of the announcement that Kinder Morgan Energy Partners had agreed to acquire El Paso Corporation, KMP announced Oct. 24 that it has signed a definitive purchase and sale agreement to acquire SouthTex Treaters, a manufacturer, designer and fabricator of natural gas treating plants that remove CO2 and H2S, for approximately $155 million.
The manufactured amine plants range in size from 5 to 1,200 gallons per minute of treating capacity. Kinder Morgan Treating, a subsidiary of KMP, is the largest provider of contract operated treating and hydrocarbon dew point conditioning plants. KMP says the acquisition will allow Kinder Morgan Treating to build amine plants and offer customers the option to own or lease the equipment.
“This acquisition will enable us to provide large amine plants for centralized treating facilities which are often needed in the rapidly developing shale plays,” said Bill Stokes, vice president of Kinder Morgan Treating. “We will also be able to replenish our already large inventory of amine plants and offer our customers even more flexibility for their treating needs.” Upon closing, which is likely to occur within the fourth quarter this year, the transaction is expected to be immediately accretive to cash distributable to KMP unit holders.