Oil refiner-to-retail major Reliance Industries on Monday said it has entered into a deal to sell its stake in its US-based shale gas operations for $1.07 billion.
According to the company, Reliance Holding USA, a subsidiary of Reliance Industries, has entered into a definitive agreements for the sale of its entire holding of 49.9 percent interest in EFS Midstream to an affiliate of Enterprise Products Partners.
"EFS has succeeded in its objective of building the gathering and midstream infrastructure in a timely manner to support ramp-up of the 'Reliance-Pioneer Eagle Ford Upstream' joint development operations," Walter Van de Vijver, president and chief executive of Reliance Holding USA was quoted in a statement.
"EFS has now transitioned from a 'development' mode to 'stable operations' mode, generating free cash flows since 2013. EFS monetization thus provides a significant opportunity for unlocking value for our shareholders."
Currently, EFS is jointly owned by Reliance Holding USA and an affiliate of 'Pioneer Natural Resources Company', with their respective ownership interests being 49.9 percent and 50.1 percent.
The company's agreement to sell it's interest in EFS is part of a joint transaction, wherein both Reliance and Pioneer have agreed to sell their entire respective holdings in EFS, for $2.15 billion.
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The company added that it has also concluded certain long term agreements with Enterprise for continued provision of gathering, treating and compression services and condensate stabilisation services for its 'Eagle Ford Upstream Joint Development'.
"Certain additional long term arrangements have also been agreed with affiliates of Enterprise for processing and transportation of natural gas, crude oil and condensate," the statement added.
EFS provides gathering, treating and compression services and condensate stabilisation operations in the 'Eagle Ford Shale' for the Reliance-Pioneer upstream joint development and to third parties.
Since inception in 2010, EFS has built significant midstream infrastructure, which now comprises of 10 central gathering points, 460 miles of gathering pipelines, 119 Mboepd (thousand barrels of oil equivalents per day) of condensate stabilisation capacity and 780 MMcfd (millions of cubic feet per day) of natural gas treating capacity.