Regency Energy, Crestwood Midstream Both Plan Major Acquisitions in U.S. Shale Market

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Two planned acquisitions in the Oil & Gas Transmission Industry demonstrate the growing interest in the Marcellus, Utica and Bakken shales. Regency Energy Partners LP (NYSE:RGP) (Dallas, Texas) announced plans to buy PVR Partners LP (NYSE:PVR) (Radnor, Pennsylvania) for $3.8 billion, plus assumed net debt of $1.8 billion, while Crestwood Midstream Partners LP (NYSE:CMLP) (Houston, Texas) entered into an agreement to buy Arrow Midstream Holdings (Tulsa, Oklahoma) for $750 million. The general partner and incentive distribution rights for Regency are owned by Energy Transfer Partners LP (NYSE:ETE) (Dallas).

Regency, which already holds assets in the Permian Basin, southern Texas and northern Louisiana, will have a stake in the Marcellus and Utica shales and the Granite Wash if its acquisition of PVR goes as planned. Regency's board of directors announced Thursday that it had unanimously approved a definitive merger agreement for the deal, which is expected to close in the first quarter of 2014. The company will continue under the name Regency and keep its headquarters in Dallas.

Industrial Info is tracking the proposed, $80 million expansion of Regency's Bones Cryogenic Natural Gas Processing Plant in Barstow, Texas. As planned, the Phase II project involves constructing a natural gas train from the Bone springs and Avalon formations with a capacity of 100 million standard cubic feet per day of natural gas. The train will increase the plant's total capacity from 125 million to 225 million standard cubic feet per day.

"From an operating viewpoint, the addition of PVR's Marcellus and Utica fee-based revenue business adds to and diversifies the already-excellent basin presence of Regency," said William Shea, the chief executive officer of PVR, in a conference call. "In the mid-continent, PVR's assets and operations are complementary to Regency, providing a larger footprint and the opportunity to serve our producers in a more efficient, cost-competitive way."

Crestwood's planned purchase of Arrow, which is expected to close in the fourth quarter of 2013, is expected to make the company one of the largest pipeline and storage providers in the Bakken Shale. In a press release, Crestwood estimated that it will service about 18% of current Bakken crude oil production after the acquisition is complete. The company also said it would handle more than 470,000 barrels per day of crude oil and natural gas liquids in the U.S., as well as more than 2 billion cubic feet per day of natural gas through its gathering systems and transportation assets.

Arrow currently owns and operates gathering systems for crude oil, natural gas and water on the Fort Berthold Indian Reservation, which is at the heart of the Bakken Shale in North Dakota. Its system has more than 460 miles of gathering pipeline with volumes of about 50,000 barrels per day of crude oil, 15 million cubic feet per day of natural gas, and 8,500 barrels per day of water.

Industrial Info is tracking $70 million in proposed activity for Crestwood's Tygart Valley Pipeline Project in the Marcellus Shale. As part of the project, Crestwood is planning to install 42 miles of 16-inch-diameter transmission pipeline to transport up to 200 million standard cubic feet per day of natural gas from Preston, Taylor and Barbour counties in northeast West Virginia to Columbia Gas Transmission's WB Pipeline in Randolph County, West Virginia. Crestwood also is planning a $15 million natural gas compressor station for the pipeline in Philippi, West Virginia.

Crestwood Midstream Partners and Crestwood Holdings LLC recently completed their merger with Inergy LP (Kansas City, Missouri) and Inergy Midstream LP (Kansas City). The new company maintains the name Crestwood Midstream Partners LP and its ticker symbol. According to a press release, "Crestwood's core operations will be organized into two primary business units: the Natural Gas Unit, which will include all gathering and processing and natural gas storage and transportation assets and operations, and the Crude Oil and Liquids Unit, which will include all crude oil rail terminals, trucking and storage, as well as all NGL storage, trucking, logistics and marketing assets and operations."

View Plant Profile - 3044148 3067877
View Project Report - 300136869 300084649 300084822

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.