OGE Energy Corp. and Energy Transfer Partners LP, which has a pipeline system in Utah, agreed to create a joint venture to deliver natural gas through interstate pipelines and will offer shares to the public in the form of a master limited partnership.
The 50-50 joint venture, ETP Enogex Partners, will own stakes in pipelines, storage facilities and processing plants, according to a statement Tuesday. Operations will link fields in Oklahoma and Texas with conduits to the East and West coasts, Oklahoma City-based OGE and Dallas-based Energy Transfer said.
OGE, the owner of Oklahoma Gas & Electric Co., and Energy Transfer, the third-largest U.S. pipeline partnership by market value, didn't put a value on the joint venture. The agreement calls for an initial public offering as a master limited partnership after the venture is created. Pipeline investors have favored master limited partnerships, which don't pay corporate income taxes.
ETP Enogex will get OGE's stake in Enogex, the owner of pipelines and storage in Oklahoma, and ETP's interest in the 2,648-mile Transwestern pipeline from Texas to California, according to the statement.
Entergy Transfer also will contribute a pipeline system in Colorado and Utah and its half stake in Midcontinent Express, a 500-mile pipeline planned by Kinder Morgan Energy Partners LP from Oklahoma to Alabama.