By Pittsburgh Business Times

In a move designed to boost liquidity, Atlas Pipeline Partners LP has agreed to sell a natural gas gathering and processing system to Enbridge Energy Partners LP for $682 million in cash. The company plans to use the money to pay off debt, leaving more money to invest in the Marcellus Shale and to reinstate distributions to unitholders.

Atlas Pipeline Partners (NYSE: APL), based near Pittsburgh in Moon Township, Pa., is selling its Elk City facilities, which include 800 miles of natural gas gathering pipeline stretching from Washita County, Okla., to Hemphill County, Texas, as well as a hydrogen sulfide treating plant and three cryogenic processing plants. The companies said they expect the transaction to close in the third or fourth quarter of 2010.

In the announcement, Atlas Pipeline Partners CEO Eugene Dubay said the deal "provides significant upside for growth," particularly for Laurel Mountain Midstream LLC, a natural gas gathering system focused on the Marcellus Shale in which APL is a 49 percent joint venture partner.

While APL is turning its focus to the Marcellus Shale, Enbridge (NYSE: EEP) has its eyes on the Granite Wash, a sandstone formation in southwestern Oklahoma and the Texas panhandle also rich in natural gas. Enbridge says it will consolidate the Elk City system with its Anadarko system, increasing its capacity to process, gather and transport gas in that region.

Copyright 2010 American City Business Journals

http://pittsburgh.bizjournals.com/pittsburgh/stories/2010/07/26/daily31.html?ana=thestreet

Copyright bizjournals.com 2010

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