Nuevo Midstream, LLC, a company that gathers, treats, processes, transports and markets natural gas, is to be acquired by Western Gas Partners, LP.
The Delaware master limited partnership, which was formed by Anadarko Petroleum Corporation, will pay $1.5 billion in cash to purchase Nuevo from EnCap Flatrock Midstream, its private equity backer.
Nuevo focuses on developing and operating natural gas gathering, compression, processing, treating, transportation and marketing services to oil and gas producers in the Delaware Basin in West Texas and Southeast New Mexico.
The business started operating in August 2011 when it recommissioned a small refrigerated JT processing plant near Orla, Texas. Since then, the company has grown and its assets now include 300 million cubic feet per day (MMcf/d) of operational cryogenic processing capacity at its Ramsey processing complex in Reeves County, Texas; 1,800 gallons per minute (gpm) of treating capacity; four field compressor stations; and a 275-mile gas gathering system that spans five counties.
Another 30 miles of gathering pipeline is under construction, in addition to which a further 400 MMcf/d of processing capacity is scheduled to be in service in 2015.
Jay Lendrum, president and CEO of Nuevo, said that the company has a long-standing relationship with Western Gas.
"They are excellent operators with the ability to expand on the asset base we have put in place and are a great fit for both our customers and employees," he added.
The transaction is expected to be completed by the end of the year, subject to regulatory approval and other closing conditions.