NGL selling its 50% interest in Glass Mountain line to BlackRock affiliate for $300M

Crude oil/natural gas liquids logistics company NGL Energy Partners said Thursday it’s signed a deal with a BlackRock affiliate, in partnership with Navigator Energy Services, to sell its 50% interest in Glass Mountain Pipeline LLC for $300 million.

Glass Mountain is a multi-play crude transportation system in Oklahoma, which services the STACK/Merge, Granite Wash and Mississippi Lime plays, and delivers crude oil to Glass Mountain-owned storage at Cushing, Okla, Kallanish Energy learns.

“This transaction is another significant accomplishment that continues the deleveraging of our balance sheet and improving our credit profile,” said Mike Krimbill, NGL’s CEO. “The successful completion of this immediately accretive transaction, combined with our recently announced retail propane sale, will have a transformative effect on our financial flexibility and reduce our cost of capital, while also improving our distribution coverage.”

Glass Mountain completed construction of the original, approximately 215-mile system and began commercial operations in April 2014. A roughly 44-mile extension into the STACK was announced in December 2016, and is expected to be complete by the end of 2017, and operational in early 2018.

Once the STACK extension is completed, the system would include pipeline capacity of roughly 210,000 barrels per day (BPD) of oil, and approximately 1.8 million barrels (MMBbl) of storage, including 1.0 MMBbl located in Cushing.

Glass Mountain Pipeline is a joint venture owned equally between NGL and SemGroup.

“By partnering with the Navigator Energy Services management team in the acquisition of Glass Mountain, we look forward to delivering our clients a very attractive midstream investment opportunity,” said Mark Saxe, managing director in BlackRock’s Global Energy & Power Infrastructure (GEPIF) group.

Deutsche Bank Securities is serving as financial advisor to NGL, while McGrath North is acting as the company’s legal counsel.

Morgan Stanley is serving as financial advisor to GEPIF, and Simpson Thacher & Bartlett is acting as the company’s legal counsel.

The sale is expected to close prior to Dec. 31.