UGI-subsidiary UGI Energy Services has agreed to acquire Stonehenge Appalachia, from Stonehenge Energy, for nearly $190m.
Stonehenge operates gathering and compression systems in the Appalachian basin in the US. These include Stonehenge Appalachia, Stonehenge Laurel Gathering, and Pine Run Midstream.
The Stonehenge Appalachia system comprises more than 47 miles of pipelines and associated compression assets in Butler County, Pennsylvania. The gathering capacity of the system is approximately 130 million cubic feet per day.
UGI Natural Gas, Global Engineering, Construction and Procurement executive vice-president Robert F. Beard said that the acquisition increases its presence in the Appalachian basin.
“When we acquired the assets of Columbia Midstream Group in 2019, we committed to additional investments to build or buy quality systems in the region.
“The acquisition of Stonehenge, in addition to our recent purchase of an ownership stake in the Pine Run gathering system, demonstrates our commitment to the Appalachian basin, which averaged a record 31.9 billion cubic feet per day of production in the first half of 2021, the highest for a six month period since production began in 2008,” he added.
UGI president and CEO Roger Perreault said: “This investment is consistent with our strategy of delivering reliable earnings growth while continuing to rebalance our business activities with increasing investments in natural gas and renewables
“We are pleased to enhance our natural gas gathering capabilities through this investment in well positioned assets in the Appalachian basin.”
Subject to customary regulatory closing conditions, the transaction is scheduled to be completed by 31 January 2022.
UGI Utilities said its pipeline distribution system started receiving renewable natural gas (RNG) from Archaea Energy’s keystone landfill in Dunmore, Pennsylvania.
Despite Covid-related demand uncertainty, oil and gas production levels in the Appalachian basin have remained stable.