Energy-focused private equity firm ArcLight Capital Partners has teamed up with two US energy companies to merge their natural gas pipeline and storage businesses into an $11bn company.
ArcLight will have about 59 per cent limited partner interest in the business, CenterPoint Energy 28 per cent and OGE Energy 13 per cent.
The deal is expected to close in the second or third quarter of this year, after which the trio plan to float the entity on the stock market.
A statement from the firms said they planned to arrange a new $1.4bn credit facility and $1.05bn term loan under the partnership.
The new partnership will own and operate 8,400 miles of interstate pipelines with nearly 9bn cubic feet of transport capacity and nearly 2,300 miles of intrastate pipelines.
It will also have more than 11,000 miles of gathering lines, which in 2012 moved nearly 4 bn cubic feet of natural gas per day.
It will also have more than 90bn cubic feet of natural gas storage capacity and 11 major processing plants with nearly two billion cubic feet per day of inlet capacity.
Senior ArcLight partner Robb Turner said, “The partnership provides a very attractive investment opportunity supporting the strong growth of the US natural gas and liquids infrastructure build out.
“The combination of growth opportunities, long-term customer relationships and stable assets across many of the premier on-shore US basins complement each other well and provide a compelling investment thesis.”
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