Inergy, Crestwood form midstream partnership

Inergy LP and Crestwood Midstream Partners LP signed an agreement to create an integrated midstream partnership valued at $7 billion. According to Inergy, the agreement creates a platform of midstream assets that can provide services in key shale plays, including the Marcellus Shale and Bakken Shale.

“Both of our companies are focused on capitalizing on the rapidly developing U.S. shale plays, and we have been evaluating a number of opportunities to expand our services to gain access to incremental hydrocarbon supply,” says John Sherman, chairman and CEO of Inergy, in a press release. “Crestwood’s reputation and strong competitive position in the gathering and processing, or supply side of the business, greatly complements what we do on the demand side of the business.”

Following completion of the transactions, Robert Phillips will lead Inergy, which sold 504 million gallons of wholesale propane and other natural gas liquids in 2012. Phillips will serve as chairman, president and CEO of the combined company. A new company name will be decided at a later date.

“We view this transaction as a merger of equals through which we are creating a larger, more diversified operating platform that will be highly attractive to investors, customers, creditors and employees,” Phillips says in a press release. “Crestwood operates a portfolio of shale-focused midstream assets, but our operational capabilities and services to our customers currently end at the tailgate of the processing plant.”