BP to sell US midstream gas assets to Eagle Rock Energy for $227.5 mn

British oil giant BP yesterday said that it will sell its two US processing plants and associated gathering system in the Texas Panhandle to Eagle Rock Energy Partners for $227.5 million in cash.

The London-based company's US subsidiary BP America Production Company will sell its Sunray plant in Moore County and Hemphill County processing plant and associated 2,500 mile gathering system serving the liquids-rich Texas Panhandle.

The Sunray and the Hemphill plant have combined processing capacity of approximately 220 million cubic feet of gas a day (mmcf/d).

BP believes these assets, which serve its natural gas production in the Texas Panhandle region, will be more strategically valuable to a company that specialises in midstream oil and gas operations. The agreement does not include BP's natural gas producing assets in the area.

The transaction is expected to close in the fourth quarter of 2012, subject to regulatory approvals and customary closing conditions.

BP's North America gas business has a high quality portfolio of assets with a presence in seven of the leading gas basins in the US Lower 48 states. In 2011, BP produced over 1,800 mmcf/d natural gas in the US. BP's US onshore upstream operations are an integral part of its business, and the company said that it continues to look at opportunities for growth over the long-term.