The Money Backers: Energy Capital Partners

The Money Backers: Energy Capital Partners

In RMR’s continuing series The Money Backers, we give readers a glimpse of who’s who and who owns what in energy’s private equity world.  From the largest to the smallest to the newest, we look especially at those firms making hay in the midstream industry to provide the capital infusion required that give startups and growth projects liftoff.

Energy Capital Partners

Energy Capital Partners is a private equity and credit investor focused on existing and new-build energy infrastructure projects.

www.ecpartners.com

With offices in N.J., N.Y., and Houston, Energy Capital Partners (ECP) puts its capital and intuition on North American energy infrastructure that relies on contracted or fee-based revenues. This 40-year-old private equity firm zeroes in on new and existing companies with growth projects in the power generation, renewables, midstream, and environmental sectors. ECP’s most recent acquisition occurred in February with the $400 million purchase of Texas-based Centerpoint Energy’s natural gas retail business.

With $19 billion in capital commitments, ECP spreads its midstream investments across terminaling and storage; on- and offshore natural gas production facilities; petrochemicals processing and storage; gathering, processing and fractionation; and crude oil, natural gas, and water pipelines.

Here’s a look at the firm’s current midstream superstars.

  • With an initial “Let’s make some noise” of up to $500 million from ECP, Houston-based Next Wave Energy is moving forward with plans to construct its Project Traveler—a 28 MBPD, ethylene-to-alkylate plant near the Houston Ship Channel. The Traveler will convert NGL-based products like ethylene and isobutane into gasoline blend stock then pipe the produced alkylate to two gasoline-blending and marine terminal facilities in Pasadena. The plant is scheduled for production in mid-2022.
  • From its headquarters in Eddy County, N.M., Sendero Midstream operates the Sendero Carlsbad Gathering and Processing system. Located in the heart of the Northern Delaware sub-basin, the Carlsbad system includes 100 miles of gas gathering pipelines and two gas processing facilities that, together, offer 350 MMCFD of capacity.
  • Based in Houston, Summit Midstream operates natural gas, crude oil and produced water-gathering systems in the Appalachia, Williston, DJ, Fort Worth, and Permian basins. The company also holds legacy assets in the Piceance Basin, as well as the Barnett and Marcellus shale plays. Summit currently is developing the 135-mile Double E Pipeline, which will offer a capacity of 1.35 BCFD and provide natural gas transportation service from multiple receipt points in the Delaware Permian to delivery points in and around the Waha Hub. Commissioning is expected in 2021.
  • Headquartered in Houston, Targa Resources is one of the nation’s largest independent midstream companies whose assets primarily lie in Okla., Texas, N.M., La., and Ala. The company’s operations include expansive gas gathering and processing systems in multiple basins, gas transportation pipelines, and crude oil transmission and storage.
  • US Development Group brings something different to the midstream party through its design, development, and operation of large-scale crude oil terminals. A big distinction of this company is its focus on acquiring or building terminals that offer the full breadth of multi-modal options, especially by rail. USDG’s assets include crude oil logistics terminals in Alberta, Can., Casper, Wyo., and Stroud, Okla., near the Cushing Hub.
  • A relative newcomer to ECP’s investment portfolio, Symmetry Energy Solutions in February purchased CenterPoint Energy Services, the Texas utility’s unregulated gas retail platform. Symmetry sells, stores, and supplies natural gas to approximately 30,000 commercial and industrial customers, utilities, and municipalities across 35 states.

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The Midstream Range Rover

The Midstream Range Rover

You could say Sugar Land, Texas-based Rangeland Energy is somewhat of a train buff when it comes to building refined products hubs. Through its various iterations as a portfolio company of private equity firm EnCap Flatrock, this midstreamer has developed crude oil distribution systems that offer access to multi-modal transportation options to deliver crude oil, natural gas, NGLs, and other petroleum products to North American markets. And rail cars play a big part in this company’s business strategy.

Rangeland Energy

Rangeland Energy is a midstream company that meets the infrastructure requirements of refiners, commodities marketers, producers and retail distributors in resource plays and growing markets.

www.rangelandenergy.com

Rangeland first developed the Bakken’s N.D., COLT Hub in 2012, which offers connections to outbound pipeline systems and crude-by-rail service. That company sold months later to what is now known as Crestwood Energy Partners.

Develop, learn, operate, exit.

And Rangeland did.

Applying its newfound knowledge of rail service and listening to market demand, Rangeland in 2013 started up its RIO Hub in the Texas Delaware sub-basin, solidifying its midstream niche to provide pipeline connections and rail services at its terminals. But this time, Rangeland also expanded its capabilities to include inbound frack sand storage and loading outbound truck services.

Two years later, Rangeland Energy with the support of its financial backer, fired up a second, simultaneous venture to develop the South Texas Energy Products System (STEPS), which began operations in 2018. The system receives and stores refined products, LPG, and other hydrocarbons at a Corpus Christi terminal and transports supplies to terminals in Mexico. The Corpus Christi terminal is strategically located along the Kansas City Southern Railroad mainline.

At the same time, Rangeland took a hard look at western Canada, where E&Ps operating in the huge Montney shale play of Alberta have battled a dearth of natural gas midstream assets to transport supplies to markets. The company created subsidiary Rangeland Canada to introduce its commercial model to an underserved area and has now announced service on its new 52-mile Marten Hills Pipeline System. The crude oil and condensate pipelines originate near Slave Lake, Alberta, and terminate at the Edmonton Hub and refining market, a major crude oil rail loading terminal.

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Berkshire Hathaway Makes a New Deal-and It’s a Big One

Berkshire Hathaway Makes a New Deal-and It’s a Big One

In its largest deal in four years, conglomerate giant Berkshire Hathaway has scooped up the natural gas pipeline and storage assets from Dominion Energy in an all-cash deal valued at $10 billion. The announcement came concurrently with news that the utility giant would scrap its plans to build the 600-mile Atlantic Coast pipeline after years of costly regulatory and environmentalist battles. Two other proposed pipelines have been shelved this year in the eastern region.

Bershire Hathaway

Berkshire Hathaway is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States.

www.berkshirehathaway.com

Dominion Energy

Dominion Energy, Inc. is an American power and energy company headquartered in Richmond, Virginia that supplies electricity in parts of Virginia, North Carolina, and South Carolina and supplies natural gas to parts of Utah, West Virginia, Ohio, Pennsylvania, North Carolina, South Carolina, and Georgia. Dominion also has generation facilities in Indiana, Illinois, Connecticut, and Rhode Island.

www.dominionenergy.com

Dominion, the nation’s second-largest utility, serves 7 million natural gas and electrical power customers in 20 states from its headquarters in Richmond, Va. The company has set a net-zero emissions target by 2050, along with a five-year, $26 billion growth capital plan through ongoing investments in new technology, solar, wind, and renewable natural gas.

The sale to Berkshire Hathaway includes more than 7,700 miles of gas pipelines, 900 BCF of gas storage, a 25% interest in the bi-directional Cove Point LNG export terminal, and $5.7 billion in assumed debt. The conglomerate owns 10 other energy and energy-related companies as part of its Berkshire Hathaway Energy segment. Close of the Dominion deal is expected in 4Q this year.

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Enterprise Secures Long-Term Customer for Second PDH Plant

Enterprise Secures Long-Term Customer for Second PDH Plant

To the layman, Enterprise Products’ Mont Belvieu petrochemical complex just east of Houston speaks to an industrial process most find shrouded in mystery where steam puffs 24/7 amid lights that illuminate the wide Texas nightscape. But for those in the oil and gas industry, Enterprise’s Mont Belvieu complex is a steel-and-pipe engineering marvel that converts NGLs into the raw materials used to manufacture just about everything the layman uses.

Enterprise Products

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.

www.enterpriseproducts.com

Since its initial construction, the Enterprise complex has experienced a near non-stop expansion, adding more fractionators and capacity to meet growing global demand for the basic building blocks of commercial goods. And news from Enterprise’s Mont Belvieu facility also is ongoing with the company’s latest announcement of a long-term agreement with Marubeni Corporation to supply polymer grade propylene (PGP) from a second propane dehydrogenation plant (PDH2) still under construction.

Japan-based Marubeni is an integrated trading and investment conglomerate, as well as the world’s largest olefins trader. Olefins are the basis for polymers and oligomers used in plastics, resins, fibers, elastomers, lubricants, gels, solvents, detergents and adhesives.

Upon completion in 2023, PDH2, combined with six other Enterprise propylene fractionators, will have a total capacity to produce up to 11 billion pounds per year of polymer grade propylene. The company’s PGP assets include more than 300 miles of delivery pipelines, 26 connections, more than 5 MMBbls of storage, and a new export terminal that opened for business earlier this year.

To keep our subscribers up to date, here’s a look at the Enterprise NGLs wonderment so far in the last now seven months.

In RMR’s story The Enterprise That Grows Behind NGL Exports published earlier this year, we told you about the company’s inaugural ethylene cargo leaving from Enterprise’s new NGL export terminal along the Houston Ship Channel. Upon completion this year, the company’s ethylene facility at the Mont Belvieu complex will have enough capacity to produce 1 million mt/year. Enterprise at the time also announced plans to bring online two more fractionators to make propylene and isobutylene, as well as increase its ship-loading capacities of propane and butane from 32,000 barrels per hour to 40,000.

We then covered the start-up of Enterprise’s new isobutylene dehydrogenation (IBDH) plant at Mont Belvieu in our story Enterprise Advances U.S. NGL Exports. Once in full gallop, the IBDH will be capable of processing 25,000 BPD of butane into nearly 1 billion pounds of isobutylene a year. China and India are the largest importers. Enterprise’s isomerization complex is the largest of its kind in the nation and includes a 70-mile pipeline system to transport high-purity isobutane from Mont Belvieu to Port Neches, Texas.

As recently as June, we shared Enterprise, Navigator Set to Export Record Ethylene Tonnage, which they did, shipping 44 million pounds of ethylene to Japan.

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The Making of a La., LNG Hub

The Making of a La., LNG Hub

With three export terminal projects in the wheelhouse, Va.-based Venture Global LNG focuses its investments exclusively in the Bayou State with modular-designed, mid-scale liquefaction processing plants that are considered less risky and require less time to construct. The company’s proposed Plaquemines LNG Terminal, which will be located on the La., Gulf Coast, has now received federal approval to begin initial site work of the more than 600-acre location that will include 18 integrated single-mixed refrigerant blocks, four LNG storage tanks, three loading docks, and power generation facilities.

Venture Global LNG

Venture Global LNG is a long-term, low-cost producer of North American liquified natural gas (LNG). Our three export facilities, Calcasieu Pass, Plaquemines LNG and Delta LNG, will supply the world’s growing demand for low-cost, clean and reliable North American energy.

venturegloballng.com

Upon completion in 2023, the Plaquemines export terminal will produce 24 MTPA of LNG. The $8.5 billion project also includes construction of two pipelines that will interconnect with existing interstate pipelines to feed natural gas to the plant. Venture Global has signed long-term sale and purchase agreements with Polish Oil & Gas Company and Electricite de France. The company’s two other terminal projects include Calcasieu Pass in Cameron Parish, La., which will produce 10 MTPA of LNG, and the Delta LNG terminal located on a 540-acre site on the Mississippi River, south of New Orleans.

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