American Midstream Partners announces Cayenne Pipeline joint venture
American Midstream Partners announced it has entered into a joint venture agreement between AMID and Targa Midstream Services creating Cayenne Pipeline. Cayenne will transport Y-grade NGLs from the Targa-operated Venice Energy Services Company gas processing plant to Enterprise Products' pipeline at Toca, Louisiana, for delivery to Enterprise Products' Norco Fractionator. As part of the Cayenne joint venture, AMID is contributing an underutilized natural gas pipeline that will convert into high value, natural gas liquids service. The project is supported by a 15-year dedication for all NGL production from Targa's 750 MMcf/d Venice plant with inlet from six offshore pipelines in the Gulf of Mexico, including the prolific deep-water Mississippi Canyon area. The pipeline will have initial capacity of over 40,000 barrels per day with the ability to throughput more than 50,000 barrels per day. AMID and Targa will each have 50% economic interests and 50% voting rights, respectively, with Targa serving as the operator of the venture. The costs of conversion and associated construction will be shared equally by AMID and Targa. The project has received necessary change of service permits and is expected to be fully operational by year-end 2017. The joint venture is expected to be brought into service at a highly attractive cash flow multiple that is consistent with AMID's strategy of allocating capital and increasing scale to accretive projects without the need for external capital.