Funding for the acquisition was provided pursuant to previously disclosed equity and debt arrangements, PNG said.
Around $600m of equity financing was provided by the sale in a private placement of 17.4 million PNG common units to third-party purchasers and 10.2 million PNG common units to Plains All American Pipeline as well as PAA’s proportionate general partner contribution.
The debt financing consisted of PNG selling a three-year, $200m note to PAA at an interest rate of 5.25% per annum.
PNG said that pending investment in expansion activities at Southern Pines, excess proceeds will be used to reduce its existing indebtedness.
Giving effect to these transactions, PAA holds an aggregate 64% equity ownership in PNG, including 100% of PNG’s general partner and its incentive distribution rights.
SG Resources Mississippi owns the Southern Pines Energy Center natural gas storage facility, which began its operation in 2008 and is permitted for 40 billion cu ft (bcf) of working capacity from four storage caverns.
Southern Pines is a FERC-regulated, salt-cavern natural gas storage facility located in Greene County, Mississippi.
Southern Pines connects directly or indirectly to eight major natural gas pipelines servicing the Gulf Coast, Northeast, Mid-Atlantic and Southeastern markets.
