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July 18, 2022

Momentum Midstream to buy $1.3bn pipeline assets from Midcoast Energy

The acquisition is backed by funds from EnCap Flatrock Midstream.

Privately-owned Momentum Midstream has agreed to acquire Midcoast Energy ’s pipeline assets in the US for $1.3bn, including debt, reported Reuters, citing people familiar with the matter.

The sale includes assets located in the East Texas part of the Haynesville Shale.

The acquisition of the assets is supported by funds from US-based private equity firm EnCap Flatrock Midstream , according to the sources.

In April 2022, it was reported that Midcoast was considering the sale of its East Texas pipeline assets for as much as $2bn.

At that time, the firm was reviewing the sale of its assets located in the East Texas portion of the Haynesville formation, that also stretches into Louisiana.

The divestment forms part of Midcoast’s efforts to capitalise on increasing the value of the energy pipeline assets as a result of surging global oil and gas prices, which touched a multi-year high, due to Russia’s invasion of Ukraine.

Midcoast Energy is owned by buyout firm Arclight Capital Partners and operates 5,834km of gathering and processing pipeline network to transport natural gas and natural gas liquids (NGL).

It also operates six processing plants, with a capacity of approximately 700 million cubic feet per day, as well as seven treating plants, with a capacity of nearly 1.1 billion cubic feet per day.

Through its logistics and marketing segment, the energy firm also transports and markets NGL, natural gas, condensate, crude oil, and related liquids products.

Arclight purchased Midcoast Energy from pipeline operator Enbridge in 2018 in a deal worth $1.1bn.

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