Marketing assets

Momentum Midstream Acquires Assets of Midcoast Energy for $1.3 Billion

NEW YORK, July 15 (Reuters) – Privately held Momentum Midstream has agreed to buy pipeline assets in the eastern Texas portion of the Haynesville Shale from Midcoast Energy for $1.3 billion including debt, investors said on Friday. sources familiar with the matter.

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 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.

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Midcoast Energy is owned by another buyout firm, ArcLight Capital Partners. Reuters reported in April that Midcoast hoped to sell assets for as much as $2 billion. Read more

Midcoast, ArcLight, Momentum and EnCap Flatrock did not respond to requests for comment.

Energy pipelines have gained in value since Russia’s attack on Ukraine in February pushed oil and gas prices to multi-year highs. Private equity firms, which own energy companies, are looking to cash in and sell off these assets at high valuations.

However, commodity price volatility makes it difficult for buyers to match sellers’ price expectations. The value of U.S. oil and gas acreage sold in the second quarter fell two-thirds from the same period last year, data provider Enverus said this week. Read more

Midcoast Energy operates a 3,625-mile (5,834 km) gathering and processing pipeline system 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 had acquired, including a deal in December to divest assets in Oklahoma to another private equity-backed midstream company.

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Reporting by David French in New York; Editing by Josie Kao

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