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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National Fuel Grows Its Energy Empire

National Fuel Grows Its Energy Empire

N.Y.-based National Fuel Resources has once again diversified its midstream capabilities with the acquisition of a crude oil terminal in Gibson, La., by the company’s Empire Pipeline subsidiary. Previously owned and operated by Equilon (Shell Oil Products and Shell Oil Co.), the new assets mark Empire’s first entry into crude oil terminalling—an area it plans to grow through future acquisitions.

National Fuel Reources

National Fuel Resources, Inc. (NFR) is among the largest non-utility suppliers of natural gas in this region. For more than 25 years, NFR has been helping businesses in New York and Pennsylvania with their natural gas costs.

www.nfrinc.com

Located in Terrebonne Parish near the Intracoastal Waterway, the Gibson Terminal offers 300,000 barrels of tank storage along with barge loading and unloading and a truck receiving station. The facility handles sweet and sour crude from the Eagle Ford, Permian, and Bakken via the Ship Shoal Pipeline System, the Atchafalaya Pipeline, and the Magellan Pipeline. Empire says it also plans to build a bi-directional pipeline connection to Shell’s 350-mile Zydeco pipeline.

National Fuel in May acquired Shell’s upstream and midstream gathering assets in Pa., for $541 million. The transaction included 200,000 acres in Tioga County, with net proved developed gas reserves of approximately 710 BCF, 142 miles of gathering pipe, and more than 100 miles of water pipelines—all of which support the production operations.

National Fuel’s business segments include a natural gas utility, exploration and production, natural gas transportation pipelines and storage, and natural gas gathering.

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The Money Backers: Cresta Fund Management

The Money Backers: Cresta Fund Management

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 to give growth projects liftoff.

Cresta Fund Management

Cresta Fund Management is a middle-market focused private equity firm with a conservative, value-added approach to infrastructure investing. It seeks to invest in hard asset transportation, storage, and processing businesses primarily in the energy, chemicals and water sectors.

www.crestafunds.com

Dallas-based Cresta Fund Management likes good infrastructure ideas, whether they’re hatched from startups or companies that have been around awhile. This private-equity firm exclusively targets mid-market midstream investments with assets that include oil and gas pipelines, processing, and storage. And, at least for now, Cresta has found those investments squarely in Texas with typical check sizes that range between $50 and $250 million. Founded in 2016, the firm currently holds six midstreamers in its portfolio—one of which made headlines today with a new growth announcement.

  • Houston-based Easton Energy says it will expand its NGLs and olefins storage at the underground salt dome caverns in Markham, Texas. The company holds exclusive rights to develop and lease certain caverns that will support a slate of fractionators and petrochemical plants coming online this year and beyond. Easton also looks to add crude storage at the site, where it has rights to 13 caverns and 50 MMBbls of storage. Easton in March 2019 acquired 415 miles of La., and Texas Gulf Coast NGLs pipelines from Williams for $177 million in cash.
  • Sentinel Midstream, through subsidiary Texas GulfLink, is developing a crude oil deepwater export terminal 32 miles off the Gulf Coast at Freeport with the capability to load VLCCs at a rate of 1.2 MMBPD. The Texas GulfLink project will include an onshore oil storage terminal connected by a 42” pipeline to a manned offshore platform. Sentinel is headquartered in Dallas.
  • Dallas-based Ocelot Energy Management offers end-to-end management services for liquid and natural gas pipelines, processing plants, terminals, and storage facilities. Turnkey services include operations and maintenance; engineering, permitting, construction management and technical support; and financing and accounting.
  • Blackbuck Resources designs and builds produced-liquids infrastructure between well sites and processing facilities. Based in Houston, Blackbuck operates across Texas, N.M., and Okla., offering gathering, disposal and treatment solutions, as well as pond management.
  • From The Woodlands, Texas, NAmerico Energy has numerous projects on its whiteboard. Although construction has been delayed until 2021, NAmerico’s first venture will be the 445.5-mile natural gas Pecos Trail Pipeline that will provide a direct link between the Permian and Gulf Coast demand centers. NAmerico also plans to build two laterals that will include the 40-mile Midland, which will extend from Sprayberry to Sheffield, Texas, and the 55-mile Orla in the Delaware that would connect to the Pecos Trail Pipeline at the Waha hub.
  • Dallas-based startup Cornerstone Midstream has partnered with a private producer in Andrews County, Texas, to build out a midstream system in the Midland sub-basin that will include natural gas gathering and processing as well as crude oil and water gathering.

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The Operators:  Harvest Midstream

The Operators: Harvest Midstream

Through numerous acquisitions, new builds, and strategic joint ventures, Houston-based independent Harvest Midstream—an affiliate of heavyweight Hilcorp Energy—has proved itself one heckuva force of nature. Founded in 2002, Harvest has spread like scatter-fire over the years to operate crude oil, natural gas, and NGLs assets in La., Texas, N.M., Ohio, Colo., Pa., and Alaska. The company’s operations include gathering and transmission pipelines, gas processing and treating facilities, the SW Pass Terminal on the La., Gulf Coast, the Forked Island Terminal in southern La., the Wellsville Terminal along the Ohio River, and the West Ranch to Point Comfort Terminal on the Texas Gulf Coast.

Harvest Midstream

Harvest Midstream is an entrepreneurial, privately-held midstream service provider headquartered in Houston, Texas. Harvest Midstream safely and responsibly transports and processes oil, natural gas and natural gas liquids across the United States. We have assets in Alaska, Louisiana, New Mexico, Ohio, Pennsylvania and Texas.

www.harvestmidstream.com

And the company hasn’t stopped there. Not by a long shot.

Harvest now has announced completion of the 24-mile Ingleside Pipeline, which will originate from its new, under-construction Midway Terminal in Taft, Texas. The new pipeline will flow Eagle Ford crude to multiple oil export terminals in the area, including Flint Hills and the under-development Texas Gateway, as well as others in the Midway and Taft areas. With a full capacity of 600,000 BPD, the Ingleside Pipeline will shuttle up to 380,000 BPD from the company’s Harvest Eagle Ford pipeline system, which includes its Arrow and Pearsall lines. The Midway Terminal, estimated for completion by 4Q 2020, will cover 160 acres with enough crude oil storage space to hold more than 10 MMBbls.

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