SemGroup LP will provide a $4.9 million letter of credit to secure future obligations under the Asphalt Terminalling and Storage Agreement with publicly traded SemGroup Energy Partners LP.
The announcement came Tuesday from U.S. Bankruptcy Court in Delaware, which approved an order relating to matters between SGLP and SemGroup.
The announcement was also made in an 8K filing with the Securities Exchange Commission.
SemGroup filed bankruptcy in July. SemGroup Energy Partners is not a party to the bankruptcy filings, but is a part of various agreements with SemGroup LP and its subsidiaries, including some that are debtors in the bankruptcy filings.
The agreement provides clarity around the relationship between the privately held SemGroup and allows the publicly traded SemGroup Energy Partners to focus on its own independent business plan, said Kevin Foxx, SGLP president and CEO.
Among other things, the settlement stipulates that SemGroup will pay SGLP more than $3.1 million utility costs paid by SGLP over the weeks since the filing.
SemGroup will make payments under the Crude Oil Throughput Agreement for the month of August and for September, based upon the monthly contract minimums in the Crude Oil Throughput Agreement.
SemGroup will continue to provide services in accordance with the Amended Omnibus Agreement through at least Nov. 30.
SGLP and the private company resolved among themselves that SGLP is the proper party to receive payments under a third-party storage agreement; and
SGLP will enter into a specified lease with the Private Company to permit the Private Company to construct a pipeline.
“We believe this is a reasonable settlement between the two parties,” Foxx said.