Crestwood Midstream

Exactly one month ago MDN told you that Crestwood Equity Partners LP and Crestwood Midstream Partners (with operations in the northeast)–two different companies on paper–would merge (see Crestwood Equity/Midstream Announce Date to Merge Two Companies). Crestwood Equity Partners is a master limited partnership (MLP) that operates an NGL supply and logistics business and previously owned, on paper, 4% of Crestwood Midstream Partners, a pipeline business operating in multiple U.S. shale plays. Crestwood Midstream also had an NGL business. The two said they would complete a merger of the separate companies by yesterday, Sept. 30–and by golly, they did…
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More high finance stuff–this time in the midstream world. Crestwood Equity Partners LP and Crestwood Midstream Partners are, on paper, two different companies. Crestwood Equity Partners is a master limited partnership (MLP) that operates an NGL supply and logistics business and currently owns, on paper, 4% of Crestwood Midstream Partners, a pipeline business operating in multiple U.S. shale plays. Crestwood Midstream also has an NGL business. The two Crestwood companies merged with and took over Inergy Midstream in an $8 billion deal in October 2013 (see Crestwood/Inergy Complete Their Merger Today, Worth $8B). Now, in a move they call “simplification,” Crestwood is combining the two companies, Equity Partners and Midstream, into one. Yesterday the two companies jointly announced a special meeting on September 30th to vote on the proposed merger/simplification. Back in May when the company announced plans to merge the two together, Wall Street didn’t like it, sending Equity Partners’ stock down 17%…
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Crestwood Midstream Partners issued their second quarter 2015 update yesterday. Unlike Sunoco Logistics Partners which generated and distributed the most money ever in a single quarter (see today’s Sunoco LP story), Crestwood experienced a net loss of $42 million over the same quarter last year. But when you dig deeper you find that $40 million of that was a devaluation of its assets on paper. In other words they only lost around $2 million of cash in operations. Compared to the deep hole drillers are in, Crestwood’s shortfall is nothing. Crestwood has operations in the Marcellus as well as several other major shale plays. One bit of news we noticed from this update: Crestwood “continues to move forward with customer discussions and preliminary design work for the 1.0 Bcf/d MARC II pipeline project to interconnect with the announced Penn East Pipeline project in 2017.” We first told you about the MARC II in October 2014 (see Crestwood Announces Successful Open Season for MARC II PA Pipeline). No mention in the 2Q15 update about the Seneca Lake propane storage project that is still, inexplicably, not approved by the NY Dept. of Environmental Conservation now going on six years…
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Crestwood Midstream is a pipeline company with operations in several shale plays, including the Marcellus and Utica. They are a smaller but meaningful player in the northeast. Crestwood has 65 miles of natural gas gathering pipelines in Harrison and Doddridge counties in WV–along with eight compressor stations. They also own property along the shore of Seneca Lake in New York where there is a depleted salt cavern where they want to turn into an underground storage facility for liquefied propane (see Crestwood Execs on Radio to Promote Propane Storage @ Seneca Lake). That project is making progress after years of delays by the New York Dept. of Environmental Conservation. Crestwood merged with (bought out) Inergy Midstream in 2013 in an $8 billion deal (see Crestwood/Inergy Complete Their Merger Today, Worth $8B). With the dust finally settled from that deal, Crestwood announced on Monday they are reorganizing the merged company into several new units–and along with that reorganization comes several executive promotions…
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Crestwood Midstream is a pipeline company with operations in several shale plays, including the Marcellus and Utica. They are, like Summit Midstream, another smaller but meaningful player in the northeast. Crestwood has 65 miles of natural gas gathering pipelines in Harrison and Doddridge counties in WV–along with eight compressor stations (see the map below). Another major initiative by the company is to convert a depleted salt cavern along the shore of Seneca Lake in New York into an underground storage facility for liquefied propane (see Crestwood Execs on Radio to Promote Propane Storage @ Seneca Lake). Like fracking in New York, so far that facility has been blocked by the efforts of anti-drillers (really fossil fuel haters). The state Dept. of Environmental Conservation recently held a hearing about the facility–but from what we can tell, the process to issue a permit remains stalled. At any rate, Crestwood issued their first quarter update yesterday and they report, among other good news, that natural gas liquids (NGL) volumes are higher in 1Q15 vs a year ago mainly due to an increase of NGLs flowing in the Marcellus/Utica…
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It’s still the season to float “unsecured notes” (i.e. IOUs) for both drillers and pipeline companies. The latest we’ve noticed is Crestwood Midstream. A year and a half ago Crestwood merged with and bought out Inergy, creating a large pipeline and processing plant company with major operations in the northeast (see Crestwood/Inergy Complete Their Merger Today, Worth $8B). Yesterday Crestwood floated notes hoping to score $700 million in cash, to be used to pay down older debt. Here’s their announcement…
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