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Momentum Midstream Becomes a Leader in Haynesville Due to Latest Acquisitions
10/13/2022
Houston-based company Momentum Midstream LLC on September 22 purchased Midcoast Energy LLC’s East Texas business from an affiliate of ArcLight Capital Partners LLC and Align Midstream LLC from Tailwater Capital and claimed that it establishes a leading presence in the Haynesville Shale.
Terms of the transactions were not disclosed. However, Momentum’s long-time financial partner, EnCap Flatrock Midstream, came alongside some proven institutional energy investors in Yorktown Energy Partners, Martin Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream Partners, and Blackstone Credit to support Momentum’s Haynesville Shale expansion plans, which also add a new carbon capture project, according to EnCap Flatrock Managing Partner and Founder Billy Lemmons.
The deal of Midcoast’s East Texas business, known as Midcoast ETX, and Align Midstream was presented by Momentum alongside a new natural gas gathering and carbon capture project in the Haynesville Shale.
New Generation Gas Gathering or NG3 project will collect natural gas produced in the Haynesville Shale for re-delivery to premium Gulf Coast markets, including LNG export. Moreover, the NG3 project includes a carbon capture and sequestration component that will eliminate 100% of the CO₂ and accumulate it underground for a long time, creating a net negative carbon footprint.
With the combined assets of Midcoast ETX and Align Midstream, Momentum is currently delivering volumes of more than 2 Bcf/d for a diverse customer base composed of producers, utilities, end-users, and LNG exporters.
Momentum’s footprint in the Haynesville includes about 3,000 miles of gathering pipelines, 1.5 Bcf/d of treating capacity, 700 MMcf/d of processing capacity, 200,000 HP of compression, and 820 miles of pipelines transporting gas to the Gulf Coast markets in southeast Texas and the Carthage and Bethel markets in East Texas.
NG3 FID
Momentum also announced on Sept. 22., that the board of directors took a final investment decision (FID) on NG3, its new natural gas gathering and carbon capture project.
The NG3 project is financed by an anchor commitment from Chesapeake Energy Corp. and will have an initial capacity of 1.7 Bcf/d and is expandable to 2.2 Bcf/d.
Momentum CEO said that constant with the past business practices, Chesapeake Energy’s anchor commitment for NG3 comes with an option to get 35% of the project, creating alignment between Momentum and one of the biggest Haynesville Shale producers.
The NG3 project will also capture and permanently sequester up to 2 million tons per annum of CO₂ and is anticipated to start operations in the second half of 2024.
Barclays served as the exclusive financial adviser to Momentum on the Midcoast ETX acquisition. Barclays also arranged the deal financing along with Jefferies Finance LLC, Blackstone Credit, and Wells Fargo Securities LLC.
Jefferies LLC took a part as the exclusive financial adviser to Momentum on the Align acquisition. Vinson & Elkins LLP served as legal counsel to Momentum on both the Midcoast ETX and Align Midstream acquisitions.
Jefferies LLC and Latham & Watkins LLP advised ArcLight Capital Partners LLC on the sale of Midcoast. Piper Sandler & Co. and Locke Lord advised Tailwater Capital on the sale of Align Midstream.
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Hydro-Québec to acquire Great River Hydro With 13 hydropower generating stations in New England
Vermont Business Magazine HQI US Holding LLC, a wholly-owned subsidiary of Hydro-Québec, concluded the agreement to purchase Great River Hydro, LLC, which possesses 13 hydropower generating stations with a total capacity of 589 megawatts along New England's Connecticut and Deerfield rivers in Vermont, New Hampshire and Massachusetts. The affiliates of Arc Light Capital Partners, LLC is selling Great River Hydro for a price of roughly US $2 billion. The facilities are situated along the Connecticut and Deerfield rivers. Hydro-Québec is the largest single supplier of electricity to Vermont, comparing to the closed Vermont Yankee nuclear power station in Vernon which produces 620 megawatts. Great River Hydro has A 589-MW hydropower fleet, 13 cascading generating stations and 3 storage-only reservoirs along some 310 miles (500 km) of the Connecticut and Deerfield rivers. Moreover, its annually supply has enough energy to power over 213,000 homes in New England. One fifth of the energy generated is subject to long-term supply contracts, guaranteeing revenue stability. Land holdings of almost 30,000 acres (12,140 hectares), allowing for the possibility of various renewable energy projects.
Kinder Morgan Invests $1.8 Billion in South Texas Gas Infrastructure
Kinder Morgan's strategic acquisition of STX Midstream from NextEra is a significant move to enhance its infrastructure capabilities in South Texas. The area is witnessing an upsurge in natural gas production and demand, particularly towards Mexico and the Gulf Coast markets. The 462-mile pipeline system, which is highly contracted with an average contract length of over eight years, is expected to generate about $181 million in EBITDA for 2023.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.