Hartree Partners Buying Plains All American’s Natural Gas Storage Assets for $850 Million

Plains All American and Hartree Partners announced the execution of definitive agreements whereby Plains will sell its Pine Prairie and Southern Pines natural gas storage facilities to an affiliate of Hartree for a total cash consideration of $850 million.

Plains All American
Plains All American

"Successful completion of this transaction will enable Plains to exceed our 2021 asset sales target of $750 million, generating additional free cash flow and building momentum to reduce debt and increase investor returns," said Willie Chiang, Chairman and CEO of Plains. "This is a win-win transaction for both parties.”

Hartree is receiving high-quality critical infrastructure in a strategic market, Chiang said.

"The Pine Prairie and Southern Pines natural gas storage facilities are two of the highest performing natural gas storage facilities in the United States," said Steve Semlitz, co-founder of Hartree Partners. "We are attracted to the facilities' strategic location in the Gulf Coast and diverse mix of pipeline, utility and LNG customers. Hartree looks forward to working with the existing management and operating teams to build upon their outstanding customer relationships and operating track record."

The assets included in the transaction consist of approximately 70 billion cubic feet of total working gas capacity across nine caverns, along with associated base gas, header pipelines and compression facilities. Subject to the receipt of regulatory approvals and customary closing conditions, the transaction is expected to close in the third quarter of 2021. As of June 30, 2021, Plains will re-classify the assets associated with the transaction to "held for sale" on its balance sheet and recognize a corresponding non-cash loss of approximately $480 million in accordance with GAAP requirements.

The following advisors served in their respective roles for the transaction: Wells Fargo Securities, LLC served as Plains' exclusive financial advisor, Vinson & Elkins LLP acted as legal counsel to Plains, and Milbank LLP acted as legal counsel to Hartree.

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