Tuesday, March 17, 2009, 4:51pm CDT
Regency Energy closes on joint ventureDallas Business Journal

Natural gas pipeline company Regency Energy Partners LP has closed on a joint venture with two firms to finance construction of Regency’s Haynesville Shale pipeline project. The pipeline expansion initiative will transport gas out of the gas-rich Haynesville Shale in Northern Louisiana.

In a press release, Regency Energy Partners (NASDAQ: RGNC) said the company has closed on the joint venture, which includes partners Alinda Capital Partners LLC and a GE Energy Financial Services affiliate.

Regency already has commitments from shippers for the use of 84 percent of the pipeline’s capacity.

As part of the joint venture, Regency brings its $400 million Regency Intrastate Gas System to the table, while GE Energy Financial Services and Alinda Capital Partners have agreed to contribute $126.5 million and $526.5 million, respectively, in cash toward the venture in exchange for a 12 percent and 50 percent interest, respectively, in the partnership.

Regency will receive a cash payment covering the entire cost of the expansion project. The cash payment also provides Regency with a level of financing that enables the expansion project to move forward, while allowing Regency to continue to finance its current distribution levels.

The expansion is projected to double Regency’s pipeline system in North Louisiana. The project should be in service by the end of this year


Buck