Natural gas pipeline operator,
Energy Transfer Partners LP
) reported the completion of the divestiture of the assets of
Missouri Gas Energy (MGE) to a subsidiary of utility gas
The Laclede Group, Inc.
). MGE belongs to Southern Union Company, which is a fully owned
affiliate of Energy Transfer. Earlier on Jul 17, 2013, Missouri
Public Service Commission, an independent regulatory body,
permitted the sale of the MGE properties.
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Energy Transfer reveals that the sale was completed on Sep 1,
2013 and the net proceeds from the transaction were roughly
Energy Transfer added that the divestment of the natural gas
distribution properties of New England Gas Company (NEG) --
Southern Union's division -- is expected to be over by the fourth
quarter of 2013. The deal is projected to contribute roughly
$60.0 million after deducting debt. However, the contract is
subject to approval from the regulators.
The divestment of the MGE and NEG assets by Southern Union is
part of Energy Transfer's efforts to get rid of properties that
do not fit into the partnership's long-term growth plan. The
midstream entity expects to use the transaction proceeds to pay
off debt under its revolving credit facility.
Dallas-based Energy Transfer is a master limited partnership
(MLP) engaged primarily in the gathering, processing, storage and
transportation of natural gas.
Energy Transfer is well-positioned to compete in the natural gas
midstream and transportation & storage businesses with its
geographically-dispersed asset mix. The partnership has a
significant market presence in each of its operating areas, which
are located in major natural gas-producing regions of the U.S.
However, acquisitions have historically played a major role in
the partnership's growth profile and are expected to remain
significant in the future as well. Energy Transfer may find it
difficult to complete accretive transactions in the future, which
could negatively impact its growth rate.
Energy Transfer currently retains a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
However, one can look at oil and gas production pipeline MLPs
Delek Logistics Partners LP
Sunoco Logistics Partners LP
) that offer value. Both the stocks sport a Zacks Rank #2