NGL enters crude oil, fracturing services with High Sierra merger
BY ROD WALTON World Staff Writer
Monday, May 21, 2012
Propane marketer NGL Energy Partners LP will enter the crude oil midstream and hydraulic fracturing water treatment businesses by merging with High Sierra Energy’s entities in a $433 million stock-and-cash deal announced Monday.
The Tulsa-based NGL will widen its business segments by adding Denver’s High Sierra Energy LP and High Sierra Energy GP LLC. NGL already owned and operated propane and natural gas liquids storage, transport and distribution assets nationwide.
“Combining NGL and High Sierra creates a dynamic and diversified mid-cap MLP that will provide multiple services to upstream customers including water treatment and transportation, crude oil gathering, transportation and marketing as well as natural gas liquids transportation and marketing,” said H. Michael Krimbill, CEO of NGL.
“With our combined fleet of more than 3,000 rail cars, 18 natural gas liquids terminals from coast to coast, 3 crude oil terminals, over 90 trucks, a substantial wholesale marketing and supply network plus retail demand in excess of 140 million gallons of propane annually, we will be a full service midstream solution for gas plant and fractionation operators, crude oil producers, refiners and retailers across the country,” he added.
High Sierra’s crude oil segment includes three terminals, 32 pipeline injection facilities and the ability to handle about 50,000 barrels per day. The Denver firms’ water services segment can handle more than 80,000 barrels of water per day through a recycling plant located in the Pinedale Anticline of Wyoming.
The NGL also will add High Sierra’s seven disposal plants in the Niobrara Shale play of Colorado and a hydraulic fracturing tank rental operation with 50 tractor trailers in the Mississippian Lime oil play of northern Oklahoma and southern Kansas. High Sierra’s NGL operations lease 2,000 rail cars, owns six transloaders and moves about 45,000 barrels per day.
NGL Energy Partners, which went public one year ago this month, has acquired six other operations since its IPO. Those include propane firms Downeast Energy, SemStream, E. Osterman, Pacer and North American Propane.