San Francisco: Kansas City-based CorEnergy Infrastructure Trust has agreed a price of $245m to buy the Grand Isle Gathering System (GIGS) – a subsea, midstream pipeline network – from Energy XXI USA.
The GIGS includes 153 miles of undersea pipe that transports oil and water from six Energy XXI fields and one field operated by ExxonMobil.
CorEnergy plans to finance the purchase through a combination of stock offerings, convertible debt issues and other credit, plus some cash. It expects to conclude the deal before the end of June.
The GIGS serves oil-producing fields in the shallow portion of the Gulf of Mexico and is designed to move oil and water from offshore fields onto land. It includes a 16-acre on-shore terminal that has four storage tanks, a saltwater disposal facility with three injection wells and other assorted buildings and facilities.
It transports about 18,000 barrels of oil and 42,000 barrels of water every day and generated $486 million in revenue in the last fiscal year.
Houston-based Energy XXI USA will continue to operate the GIGS under a long-term lease.
CorEnergy primarily owns midstream and downstream assets that perform utility-like functions, such as pipelines, storage terminals, and transmission and distribution assets.