In its first-quarter financial and operating results, Crestwood Equity Partners announced that it has acquired “certain natural gas liquid (NGL) storage and rail-to-truck liquid petroleum gas (LPG) terminals from Plains All American Pipeline for about $160 million”.

Crestwood said the assets are complementary to its existing NGL asset footprint and include 7 million barrels of NGL storage and seven LPG terminals located in high-demand markets across the central and eastern United States. 

As a result of the acquisition, Crestwood now has about 10 million barrels of NGL and LPG storage capacity and 13 LPG terminals offering expanded propane and butane services to the market, as well as greater access to a wide range of NGL and LPG supplies from hubs, pipelines, refiners and processors.

As of April 1, 2020, the transaction closed and became effective, allowing Crestwood’s team to begin marketing the assets in time for the summer build season, it said in the update. 

Robert G. Phillips, Chairman, President and CEO of Crestwood’s General Partner, said: “We are pleased to significantly expand our NGL storage, pipeline, terminal and marketing footprint in the central and eastern U.S. regions at an extremely attractive valuation that was immediately accretive and leverage neutral for Crestwood.”

Crestwood said it expects the acquired assets to generate about $35 million to $40 million of cash flow over the next 12 months.

Phillips added: “Strategically, the acquisition enhances our MS&L (marketing, supply and logistics) business, further diversifies Crestwood’s midstream portfolio and increases cash flows on the demand side of the energy value chain at a time when our G&P (gathering and processing) assets are negatively impacted by commodity price volatility.” 

He concluded by saying: “Because these assets are located in the same regions where we traditionally store and market NGL supplies, we know the customer base well and can quickly integrate these assets into our MS&L portfolio. Despite coming at a challenging time for the industry, this transaction uniquely fits Crestwood’s investment strategy as an expansion of our current asset footprint, offers accretive returns and strengthens our midstream value chain at a pivotal time during our country’s need for vital storage and downstream infrastructure.”

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14th May 2020