Sanchez Production Partners (SPP) acquired Sanchez Energy’s 50% interest in Carnero Gathering, a joint venture that is 50% owned by Targa Resources, for about $37 million cash and the assumption of $7.4 million in capital commitments.
Carnero Gathering will own about 45 miles of high-pressure natural gas gathering pipelines, 10 miles of which is under construction, connecting SPP’s existing Western Catarina Midstream system to nearby pipelines in South Texas.
The gathering system will ultimately connect to a cryogenic natural gas processing plant under construction in La Salle County, TX and owned by another joint venture between Sanchez Energy and Targa.
The processing plant is expected to be operational in early 2017. The transportation capacity on the gathering system is held by Targa, and Carnero Gathering receives transportation fees for the service it provides in South Texas.