Creator of the article:

Reuters

NEW YORK — Privately-owned Momentum Midstream has agreed to purchase pipeline belongings within the East Texas a part of the Haynesville Shale from Midcoast Power for $1.3 billion, together with debt, individuals aware of the matter mentioned on Friday.

Houston-based Momentum has been a prolific developer of pipeline corporations, though it has been out of the market since 2019 when it offered its fourth and fifth tasks to Williams Corporations and DT Midstream respectively.

Momentum’s acquisition of Midcoast’s belongings is backed by funds from personal fairness agency EnCap Flatrock Midstream, the sources mentioned.

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Midcoast Power is owned by one other buyout agency, ArcLight Capital Companions. Reuters reported in April that Midcoast hoped to promote belongings for as a lot as $2 billion.

Midcoast, ArcLight, Momentum and EnCap Flatrock all didn’t reply to remark requests.

Power pipelines have change into extra precious since Russia’s assault on Ukraine in February drove up oil and fuel costs to multi-year highs. Personal fairness companies, which personal vitality corporations, want to money in and divest such belongings at excessive valuations.

Nonetheless, commodity value volatility is making it exhausting for consumers to fulfill the worth expectations of sellers. The worth of U.S. oil and fuel acreage offered within the second quarter was down two-thirds on the identical interval final yr, knowledge supplier Enverus mentioned this week.

Midcoast Power operates a 3,625-mile (5,834 km) gathering and processing pipeline community that transports pure fuel and pure fuel liquids, in addition to a advertising and marketing and logistics enterprise, in accordance with its web site.

ArcLight purchased Midcoast Power in 2018 for $1.1 billion from pipeline operator Enbridge Inc. It has since offered a number of the unique pipelines it acquired, together with a deal in December to divest belongings in Oklahoma to a different personal equity-backed midstream firm. (Reporting by David French in New York; Modifying by Josie Kao)

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