TULSA, Okla.--(BUSINESS WIRE)--SemGroup Energy Partners, L.P. (NASDAQ: SGLP - News) today announced that it has acquired the Eagle North Pipeline System (the ENPS), a 130-mile, 8-inch pipeline that originates in Ardmore, Okla. and terminates in Drumright, Okla. from SemCrude, L.P. for $45.0 million. SemCrude is a subsidiary of privately owned SemGroup, L.P. The pipeline previously was part of Explorer Pipeline’s 8” Product System that originates in Arlington, Texas. The acquisition was funded with borrowings under SGLP’s existing revolving credit facility.Kevin Foxx, SemGroup Energy Partners president and chief executive officer, said, “This expansion of SGLP’s asset base will provide crude oil producers an important link to the Cushing Interchange. It is expected to be accretive to unitholders beginning with our first quarter 2009 distribution.”
SGLP expects to invest up to an additional $3.5 million to convert the pipeline to a crude oil pipeline and to construct a 10-mile, 6-inch pipeline from Drumright to Cushing, Okla.
In connection with the ENPS acquisition, SGLP will amend its current Throughput Agreement with SemCrude and SemGroup whereby SemCrude will commit to transport a minimum number of barrels on the ENPS and make minimum take-or-pay payments for the term of the Throughput Agreement. In addition to SemCrude, SGLP anticipates replacing up to 50 percent of SemCrude’s initial commitment with other third-party barrels once the ENPS is operational.
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