Southcross Energy Partners LP, which filed for Chapter 11 bankruptcy protection earlier this year, agreed to sell certain natural gas pipeline assets in Texas to a Kinder Morgan Inc. subsidiary for $76 million in cash.
The partnership, its general partner Southcross Energy Partners GP LLC and its subsidiaries are divesting the Corpus Christi pipeline and Bay City lateral networks and related assets to Kinder Morgan Tejas Pipeline LLC. The U.S. Bankruptcy Court for the District of Delaware approved the deal on Aug. 30, according to a Sept. 6 SEC filing.
After the transaction is closed, the two parties will sign commercial agreements for gas supply, shared usage of some pipeline assets and equipment installation. Southcross will also provide transition services to Kinder Morgan for up to 90 days after the deal closing.
Dallas-based Southcross is engaged in natural gas gathering, processing and transportation; and NGL fractionation and transportation. In filing the voluntary petition for Chapter 11 restructuring, Chairman, President and CEO James Swent III cited the partnership's "heavier debt burden" compared to its competitors amid an unfavorable market environment.
Before filing for Chapter 11 restructuring, Southcross was delisted from the New York Stock Exchange after failing to comply with its continued listing standard.
