TexStar Midstream Services, LP Ready To Move On Business Plan

SAN ANTONIO - June 12, 2013 - PRLog -- TexStar Midstream Services, LP (“TexStar”) is pleased to announce that its parent company has raised $675 million in the Term Loan B and revolver market, which will fully fund its foreseeable business plan.  Joint lead arrangers of the financing were UBS Investment Bank and Credit Suisse Securities (USA) LLC.

“This is an exciting time for TexStar and we are starting to see our long term business plan come to fruition,” said Rob Liddell, Vice President of Business Development at TexStar Midstream Services, LP.  “TexStar has developed a robust midstream offering that will provide seamless service all the way from the wellhead through processing and fractionation.  TexStar believes providing the full suite of midstream services, including infield gathering, which many of the larger midstream companies neglect, is an attractive option for customers who want to focus solely on drilling and producing wells.”

The funding will partially be used to complete the construction of TexStar’s Lone Star Cryogenic Processing Plant which should be fully operational by early August of this year.  The Lone Star Plant is located near Pettus, TX and will have the ability to process up to 300 MMcfd of rich gas with some of south Texas’ highest liquid recoveries.  

The Pettus processing facility is supported by an existing pipeline network of approximately 200 miles of 16” and 24” rich gas gathering lines, which extends through Dimmitt, Frio, McMullen, Live Oak and Bee Counties and an approximately 60 mile 20” residue line tied into six major intra and interstate pipelines.  

The rich gas header and residue lines were developed in a JV with TEAK Midstream, LLC which was recently purchased by Atlas Pipeline Partners, LP (“Atlas Pipeline”).  Gaylon Gray, TexStar’s Vice President of Engineering and Operations commented, “We enjoyed having TEAK as a partner and believe we created a lot of value though our JV alliance.”  While Atlas Pipeline has taken over TEAK’s interest in the JV, TexStar will continue to own and control 50% of the capacity in the JV rich gas and residue pipelines and TexStar will also continue to operate the rich gas header.

Additionally, TexStar will also use the financing to construct two natural gas liquids (NGL) fractionators in Corpus Christi, Texas which it will own and control.  While the Pettus Plant will also have connectivity to Mont Belvieu fractionators and storage caverns, the Corpus fractionators will provide approximately 60,000 BPD of NGL fractionation capacity and should be operational in December 2013.  “After looking at several siting options, TexStar determined the rapidly developing Corpus Christi market was the ideal place to locate its fractionators.  We see significant value in being strategically tied to a consumer of our products,” said Jaime O’Toole TexStar’s Vice President of Commercial Marketing, referring to the agreement with LyondellBasell which was announced on April 11th.  The LyondellBasell announcement previously indicated that TexStar would install two NGL fractionation units adjacent to the Corpus Christi, ethylene plant of LyondellBasell affiliate, Equistar Chemicals, LP.

Finally, while TexStar sold all of its crude oil assets to NuStar Logistics, L.P. at the end of 2012, TexStar is actively developing several projects to move both crude and condensate as well as refined products to market.  Rob Liddell commented, “While a lot of the longer haul infrastructure is currently operating or is close to start-up, we still see shorter gathering lines and infield well connects as a niche where TexStar can offer competitive solutions for producers.”

About TexStar Midstream Services, LP
TexStar is based in San Antonio, Texas and is a portfolio company of an EIG managed fund and Tailwater Capital, owns and operates an integrated midstream business with over 550 miles of sweet and sour gas gathering pipelines, a 90 MMcfd treater, over 230 miles of gas trunk lines (held in Joint Venture with Atlas Pipeline), a 300 MMcfd cryogenic processing plant and an NGL system with y grade pipelines and approximately 60,000 BPD of fractionation capacity that will be operational later this year. http://www.texstarms.com/

About EIG

EIG is a leading institutional investor to the global energy sector with $10.3 billion under management as of March 31, 2013. EIG specializes in private investments in energy, resources and related infrastructure projects and companies. During its 31‐year history, EIG has invested over $15 billion in the sector through more than 290 projects or companies in 34 countries on 6 continents. EIGʹs clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds in the U.S., Asia and Europe. EIG is headquartered in Washington, DC, with offices in Houston, London, Sydney, Hong Kong, Seoul and Rio de Janeiro. www.eigpartners.com

About Tailwater Capital

Tailwater Capital (“Tailwater”) is a Dallas-based private equity firm providing growth equity capital across all domestic energy sectors.  The Managing Partners have focused on the energy sector for the past 14 years, investing over $1 billion in equity capital.  www.tailwatercapital.com

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