Momentum Midstream to buy Midcoast Energy assets for $1.3 bln

DT Midstream

15/07/2022 20:44

By David French
    NEW YORK, July 15 (Reuters) - Privately-owned Momentum
Midstream has agreed to buy pipeline assets in the East Texas
part of the Haynesville Shale from Midcoast Energy for $1.3
billion, including debt, people familiar with the matter said on
Friday.
    Houston-based Momentum has been a prolific developer of
pipeline companies, although it has been out of the market since
2019 when it sold its fourth and fifth projects to Williams
Companies  WMB.N  and DT Midstream  DTM.N  respectively.
    Momentum's acquisition of Midcoast's assets is backed by
funds from private equity firm EnCap Flatrock Midstream, the
sources said.
    Midcoast Energy is owned by another buyout firm, ArcLight
Capital Partners. Reuters reported in April that Midcoast was
hoping to sell assets for as much as $2 billion.  urn:newsml:reuters.com:*:nL5N2W45CA
    Midcoast, ArcLight, Momentum and EnCap Flatrock all did not
respond to comment requests.
    Energy pipelines have become more valuable since Russia's
attack on Ukraine in February drove up oil and gas prices to
multi-year highs. Private equity firms, which own energy
companies, are looking to cash in and divest such assets at high
valuations.
    However, commodity price volatility is making it hard for
buyers to meet the price expectations of sellers. The value of
U.S. oil and gas acreage sold in the second quarter was down
two-thirds on the same period last year, data provider Enverus
said this week.  urn:newsml:reuters.com:*:nL1N2YV1QK
    Midcoast Energy operates a 3,625-mile (5,834 km) gathering
and processing pipeline network that transports natural gas and
natural gas liquids, as well as a marketing and logistics
business, according to its website.
    ArcLight bought Midcoast Energy in 2018 for $1.1 billion
from pipeline operator Enbridge Inc  ENB.TO . It has since sold
some of the original pipelines it acquired, including a deal in
December to divest assets in Oklahoma to another private
equity-backed midstream company.

 (Reporting by David French in New York; Editing by Josie Kao)
 ((davidj.french@thomsonreuters.com;))