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.
Basalt Infrastructure Partners
Basalt I and Basalt II are two of the flagship Basalt Infrastructure Partner funds. They are infrastructure equity investment funds focusing on investments in utilities, power, transport, and communications infrastructure in North America and Europe. Other investments by the Basalt funds in North America include the Upper Peninsula Power Company, Texas Microgrid, DB Energy Partners, Detroit Thermal, Hyperion and Helios Power.
With an eye on mid-market infrastructure across the utility, energy and transportation spheres, N.Y.-based Basalt Infrastructure Partners looks for investments with “inflation linkage and high barriers to entry.” Translation: companies with predictable, long-term cash flows that typically have medium- to long-term contracts, and capital-intensive assets that limit the number of natural competitors. This private equity firm manages around $2 billion in assets with 17 portfolio companies that checkmark all the boxes. Current investments include an Italian ferry system, Spanish public transportation, and a telecom operator on the Isle of Man, a self-governing British Crown dependency situated between England and Ireland and known for its rugged coastline and medieval castles. But we digress.
Up until last December, Basalt’s U.S. infrastructure assets were limited to power and cogeneration plants and utility-scale solar generation. That is until a natural gas midstream opportunity popped up. When Basalt acquired Third Coast Midstream’s transmission business in late 2019, the investment came with seven gas pipelines stretching 550 miles with connections to eight major long-haul pipelines across La., Ala., Miss., Tenn., and Ark. Inflation linkage? Check. High barriers to entry? Check.
Basalt rebranded its cub Black Bear Transmission, which then set off to hunt new midstream opportunities that would expand its asset base as well as utility and industrial customers in the Southeast. With no doubt a handsome bank account to start shopping, Black Bear last week snatched up Ozark Gas Transmission (OGT) and Ozark Gas Gathering (OGG) from a subsidiary of Canada-based Enbridge. OGT’s assets include a 367-mile interstate gas transportation system extending from southeastern Okla., through Ark., and into southeastern Mo. OGG is a 330-mile gathering system that feeds gas supplies into the OGT line.
Nice catch, Black Bear.
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