February 27 - Regency Energy Partners LP, Alinda Capital Partners LLC, and an affiliate of GE Energy Financial Services have formed a joint venture to finance and construct Regency's Haynesville Expansion Project, a North Louisiana pipeline that will transport gas from the Haynesville Shale.
Regency has already secured commitments from shippers for 84% of the pipeline's capacity.
The initial 1.1 bcf/d Haynesville Expansion Project will more than double Regency's pipeline system in North Louisiana and is expected to be in-service by the end of 2009. Regency will continue to develop and operate the system through the new joint venture.
Regency will contribute to the joint venture its Regency Intrastate Gas System (RIGS) in North Louisiana, valued at $400 million, in exchange for a 38% general partnership interest in the joint venture.
GE Energy Financial Services and Alinda Capital Partners LLC, an independent private investment firm specializing in infrastructure investments, have agreed to contribute $126.5 million and $526.5 million in cash, to the joint venture in return for a 12% and a 50% general partnership interest, respectively. Regency will receive a cash payment equal to the total Haynesville Expansion Project capital expenditures paid through the closing date, subject to certain adjustments.
An affiliate of Regency will serve as the operator of the joint venture.
As a condition to the closing of the joint venture, Regency is amending its revolving credit facility. Regency is also entering into a $45 million unsecured revolving credit facility with GE, the proceeds of which may be used to pay for expenditures relating to the Haynesville Expansion Project made prior to the closing of the joint venture. Tudor, Pickering, Holt & Co. Securities Inc. acted as the financial advisor to the conflicts committee of Regency's general partner.