SemGroup sells stake in Glass Mountain Pipeline for US$300 M

SemGroup Corporation (SEMG) has reached an agreement to sell its 50 percent interest in Glass Mountain Pipeline, LLC to an affiliate of BlackRock Inc.’s Global Energy and Power Infrastructure Fund(GEPIF) in partnership with Navigator Energy Services for US$300 million.

Glass Mountain Pipeline, a joint venture owned equally between SemGroup Corporation and NGL Energy Partners LP. SemGroup subsidiary Rose Rock Midstream,owns the Glass Mountain Pipeline system. The current pipeline is 215-miles long and delivers crude oil from the Mississippi Lime and Granite Wash plays to Cushing, Okla. 

Construction on a 44-mile pipeline extension of the pipeline is expected to be complete by year-end 2017 and operational by first quarter 2018. The extension will deliver crude oil from north-central Oklahoma’s STACK/Merge resource play to Cushing.

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

The Glass Mountain sale is expected to close in the fourth quarter of 2017, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.

SemGroup President and Chief Executive Officer Carlin Conner stated:

“This accretive transaction is the first step of our capital raise plan that is associated with the funding of the second payment for the acquisition of Houston Fuel Oil Terminal Company. During the past year SemGrouphas made significant strides on our strategy to de-risk our portfolio by capturing downstream, refinery-facing growth on the Gulf Coast while also leveraging our positions in the Mid-Continent and in Canada.”

Matt Vining, CEO of Navigator Energy Services, said:

“We are very excited to build upon the foundation that SemGroup and NGL Energy Partners have successfully established in Glass Mountain. Glass Mountain represents a unique opportunity to enter an exciting resource play and continue SemGroup’s customer-focused approach to providing safe crude oil midstream services in this region. We look forward to engaging with our new customers and commercial partners as we embark on a new phase of growth.”

Mark Saxe, Managing Director in BlackRock’s Global Energy & Power Infrastructure group, added:

“By partnering with Navigator Energy Services in the acquisition of Glass Mountain, we look forward to delivering our clients a very attractive midstream investment opportunity. As a leading global energy infrastructure investor, our deep industry experience and technical expertise will enable us to bring strategic and operational insights essential to take the assets on to the next phase of their life cycle.”

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