BP Partners commits $20M to Pinnacle
BP Natural Gas Opportunity Partners LP (BP Partners), a private equity fund sponsored by oil veteran T. Boone Pickens, has committed $20 million to Pinnacle Midstream LLC, a Houston-based midstream company that will primarily acquire and develop midstream assets and provide related services in key natural gas producing basins in the US. Pinnacle anticipates focusing its operations in Texas, New Mexico, Louisiana, Oklahoma, and Mississippi.
Enlink Midstream to acquire Permian logistics company
A subsidiary of the partnership comprised of EnLink Midstream Partners LP and EnLink Midstream LLC, has agreed to acquire LPC Crude Oil Marketing LLC (LPC), which has crude oil gathering, transportation and marketing operations in the Permian Basin, for approximately $100 million, subject to certain adjustments.
LPC currently purchases, transports and sells approximately 60,000 b/d of crude oil, serving as a link between Permian producers and end markets. The acquisition expands EnLink's service offerings in the Permian Basin, adding crude oil first purchasing and logistics capabilities to EnLink's existing natural gas gathering and processing services.
"Even with the recent decline in oil prices, we believe that the Permian Basin will remain a core growth area for oil production," noted Barry E. Davis, EnLink Midstream president and CEO in a statement.
LPC's assets include 13 pipeline and refinery injection stations, a fleet of approximately 43 tractor trailers, six crude oil gathering systems totaling 67 miles of pipeline, and a crude oil first purchasing operation.
The transaction value represents a multiple of approximately eight times current run-rate adjusted EBITDA. Subject to customary closing conditions and the receipt of applicable regulatory approvals, the deal is expected to close in the first quarter of 2015. Following closing, LPC will operate as an indirect subsidiary of the partnership. The management team and employees of LPC are expected to remain with EnLink.
New natural gas gathering and processing system serves STACK play
Initial natural gas gathering operations are underway on the Tall Oak STACK System, a system owned by Tall Oak Midstream LLC. The system is designed to serve producers in Oklahoma's STACK play (the Sooner Trend, the Anadarko Basin, and Oklahoma's Canadian and Kingfisher counties) situated northwest of Oklahoma City targeting the Woodford and Mississippian-age shales. Currently gathering gas on its STACK System for multiple customers, the company expects to commission the system's first processing plant, named the Chisholm Plant, in the third quarter of 2015. The system serves producers targeting the STACK play's liquids-rich pay zones including the Upper and Lower Mississippian Meramec, Osage, Woodford shale and Hunton formations. The system will also have the capacity to serve production from the Woodford and Springer shale plays and other portions of the South Central Oklahoma Oil Province, known as the SCOOP. Tall Oak's STACK System is anchored by long-term gathering and processing agreements with Felix Energy LLC and PayRock Energy LLC. Together, Felix and PayRock control more than 100,000 net acres in the STACK play. Tall Oak is also in discussions with other producers in the area to bring gas onto the STACK System.
Cheniere, EIG finalize liquefaction project equity investment
Cheniere Energy Inc. has entered into a note purchase agreement with EIG Management Co. LLC, finalizing the definitive documentation for financing under which investment funds managed by EIG will purchase $1.5 billion of convertible notes.
Proceeds will be used as equity to fund a portion of the costs of developing, constructing and placing into service the Corpus Christi liquefaction project, which is being designed for up to three liquefaction trains with an expected aggregate annual production capacity of approximately 13.5 mtpa. The financing is scheduled to close once Cheniere reaches a positive final investment decision on the liquefaction project, expected in the first half of 2015.
All financing commitments have been obtained for the liquefaction project, including a portion of the proceeds from $1 billion of convertible notes issued by Cheniere Energy in November 2014 and the recently announced approximately $11.5 billion of debt commitments received from several financial institutions in December 2014.
Commencement of construction of the liquefaction project is subject to, but not limited to, receiving regulatory approvals, entering into long-term customer contracts sufficient to underpin financing of the liquefaction project, finalizing financing, and Cheniere making a final investment decision. Construction is expected to begin in the first half of 2015.
STW Pipeline forms alliance with Regency Energy Partners
STW Resources Holding Corp. will expand services and the scope of new construction in its wholly owned subsidiary, STW Pipeline Maintenance and Construction, in 2015. Additionally, STW Pipeline has signed an alliance contract with Regency Energy Partners for the year. In 2015, the maintenance division of STW Pipeline plans to add an additional six to eight crews in the Permian Basin. The company comments that, while the recent decline in oil prices has caused upstream production in the oil and gas industry to slow down, demand for midstream maintenance has increased mainly because the aging pipeline infrastructure is being pushed to the limit. Also, pipeline replacements of old lines require attention to keep them in service so the gas can get to market. STW Pipeline says that new pipeline installation in 2015 is very aggressive because of the needed infrastructure that is not in place to move all of the new oil and gas from the wells that have been drilled in the Permian Basin these past few years. Capital has already been budgeted for these projects that will start immediately, which affords STW Pipeline the revenue base to add additional crews to the new pipeline construction division.
Enbridge to provide crude oil pipeline for Deepwater GOM development
Enbridge Inc. will build, own, and operate a crude oil pipeline in the Gulf of Mexico to connect the planned Stampede development, operated by Hess Corp., to an existing third-party pipeline system. The lateral pipeline is expected to cost approximately $0.13 billion and be operational in 2018. The Stampede development was previously sanctioned by Hess and its project co-owners in October 2014.
Approximately 16 miles in length and 18 inches in diameter, the Stampede lateral will originate in Green Canyon Block 468, located approximately 220 miles southwest of New Orleans, Louisiana. Water depth at the location of the planned pipeline is approximately 3,500 feet.
Enbridge's offshore pipelines transport approximately 40% of the natural gas produced in the deepwater Gulf of Mexico, and 45% of ultra-deep natural gas production. The company's offshore assets include interests in 11 natural gas gathering and transmission pipelines and one crude oil pipeline in four major pipeline corridors off the coasts of Louisiana and Mississippi.
Five Point closes $450M midstream fund
Five Point Capital Partners LLC, a private equity firm focused on investments in the midstream energy infrastructure sector, has closed Five Point Capital Midstream Fund I and II LP. Total equity commitments to the fund were in excess of $450 million, exceeding its $400 million target. The Fund will focus on investments in the midstream energy infrastructure sector. Led by partners David Capobianco and Matthew Morrow, the Five Point team has extensive industry and financial expertise, including more than 100 years of collective experience investing in and operating midstream companies.
Debevoise & Plimpton LLP served as legal counsel and Mercury Capital Advisors, LLC served as placement agent.
Five Point was founded in 2011 and is based in The Woodlands, Texas. Five Point is currently investing from Five Point Capital Midstream Fund II LP and manages more than $450 million of capital commitments.
Marlin Midstream, Azure Midstream to form $500M Partnership
Marlin Midstream Partners LP, its sponsor, NuDevco Midstream Development LLC, and Azure Midstream Energy LLC have entered into definitive agreements that will result in Azure owning 100% of the general partner of Marlin and 90% ownership of the total outstanding incentive distribution rights (IDRs) in Marlin. In addition, Azure's Legacy gathering system will be contributed to Marlin for $162.5 million. NuDevco will retain all of its 10.7 million LP units, or 59.2% ownership stake, in Marlin, subject to an option granted to Azure to acquire 20% of such units from NuDevco in order to align interests and incentivize unit holder value creation.
The Legacy system consists of approximately 658 miles of high- and low-pressure gathering lines primarily under fixed-fee contracts that serve approximately 100,000 dedicated acres predominantly in the Cotton Valley formation in east Texas and northern Louisiana with access to seven major downstream markets. The Dropdown Acquisition is expected to be immediately accretive to Marlin's distributable cash flow and the cash portion of consideration is expected to be fully funded under Marlin's $225 million amended credit facility. The proposed transactions will result in a partnership with a total enterprise value of over $500 million and new sponsorship provides visibility into future dropdowns.
Azure will retain the Center gathering system and the Holly gathering system at the general partner level for future potential dropdown acquisitions into the partnership over time. The Center system consists of approximately 372 miles of high-pressure pipeline serving multiple formations, including the Haynesville, Bossier and the James Lime formation across approximately 370,000 dedicated gross acres primarily located in east Texas. The Holly system consists of approximately 335 miles of high- and low-pressure pipeline serving the Haynesville and Bossier Shale formations and the Cotton Valley formation across approximately 69,000 dedicated gross acres primarily located in northern Louisiana.
The proposed transactions are expected to close during the first quarter of 2015, subject to customary closing conditions and necessary financings. The proposed transactions are not conditioned upon the approval of the holders of the limited partner interests of Marlin.
The combined partnership is expected to generate 2015 EBITDA of approximately $47-53 million and to have a total enterprise value of over $500 million. The companies expect to realize a financial impact from the synergies of approximately $6 to $13 million on an annual run rate within the next 12-24 months.
Upon closing, the combined partnership will be headquartered in Dallas, with a continuing commercial presence in Houston, and will be led by Azure's current executive management team. The remaining partnership positions will be comprised of both Azure and Marlin personnel. The combined partnership's newly constituted Board of Directors will include representatives from both Azure's principal sponsors, Energy Spectrum Capital, and Tenaska Capital Management, independent directors, and Marlin. Upon closing, Marlin's chairman and CEO, W. Keith Maxwell III will step down from day-to-day management at Marlin; however, he has elected to maintain 100% of his common and subordinated unit equity stake in the combined partnership, subject to Azure's option with respect to 20% of those units. Additionally, Maxwell will continue to serve as a director of the combined partnership.
Wells Fargo Securities LLC acted as the exclusive financial advisor to NuDevco, and Andrews Kurth LLP acted as legal counsel for NuDevco. Simmons & Company International acted as the exclusive financial advisor to Marlin's Conflicts Committee, and Akin Gump Strauss Hauer & Field LLP acted as legal counsel for Marlin's Conflicts Committee. BofA Merrill Lynch acted as the exclusive financial advisor to Azure, and Vinson & Elkins LLP and Latham Watkins LLP acted as legal counsel for Azure.
Greyrock, Nerd Gas partner to deploy GTL facilities
Greyrock Energy has formed a partnership with Nerd Gas to deploy gas-to-liquids (GTL) facilities in the US. Nerd Gas Company LLC, a private, Wyoming-based energy investment company, is focused on exploration in Wyoming and the northern Rocky Mountain region. The company has invested in the previously announced Sterling Greyrock GTL project to confirm the commercial viability of small scale GTL. Through an affiliate, US GTL, Nerd Gas and Greyrock are partnering to explore the feasibility of gas-to-liquids plants in Wyoming and other locations.
Greyrock's facilities produce primarily premium synthetic diesel fuel from natural gas or natural gas liquids.
Qatar Petroleum, Shell cancel Al Karaana petrochemicals project
Qatar Petroleum and Shell have decided not to proceed with the proposed Al Karaana petrochemicals project, and to stop further work on the project, following evaluations of the commercial feasibility of the project in today's prevailing energy climate.
The Al Karaana project was initiated with a Heads of Agreement (HOA) between Qatar Petroleum and Shell in December 2011, and envisioned the construction of a new world-scale petrochemicals complex in the Ras Laffan Industrial City north of Qatar. The complex was to be operated as a stand-alone Qatar Petroleum-Shell joint venture (80% Qatar Petroleum, 20% Shell).
First Reserve acquires Navigator Energy
First Reserve, a global private equity and infrastructure investment firm exclusively focused on energy, has acquired Dallas, TX-based Navigator Energy Services LLC, with an equity commitment of up to $250 million.
Midstream services provider Navigator will initially focus on the continued development, construction and expansion of the Big Spring Gateway System (BSGS). Construction of the BSGS project is expected to commence in the first quarter of 2015 to supply crude oil gathering and transportation services to the core of the Midland Basin in Texas. Navigator has long-term, minimum volume commitment contracts with large crude oil marketers and multiple exploration and production companies with drilling programs in the region.
Upon completion, Navigator is expected to have constructed up to 250 miles of crude gathering pipeline and 140 miles of transportation mainline.
John O'Shea, currently managing director of Tenaska Capital Management, will lead the company as CEO.
Venture Global enters land agreement near Calcasieu Pass Project
Venture Global LNG Inc.'s wholly owned subsidiary, Venture Global Calcasieu Pass LLC, has entered into a binding agreement for an additional 63-acre parcel of land adjacent to its existing Calcasieu Pass Project site. The Calcasieu Pass Project, a liquefaction and export facility in Cameron Parish, Louisiana, filed with the US Department of Energy for Free Trade Agreement (FTA) and non-FTA export authorization in 2013 and began the pre-filing approval process with the Federal Energy Regulatory Commission in 2014. The acreage is adjacent to the northern border of the current 203.6-acre project site. With the 63 acres included, the Calcasieu Pass Project has approximately one mile of frontage on the Calcasieu Ship Channel. The Calcasieu Pass Project at peak construction will employ approximately 1,500 workers and is expected to create approximately 100 long-term, direct jobs. It is projected to be operational in late 2019.
