M6 Midstream Announces Final Investment Decision and Completes Two Acquisitions to Establish a Leading Presence in the Haynesville Shale
September 22 2022 - 4:00PM
Business Wire
- Board of Directors has reached Final Investment Decision on its
New Generation Gas Gathering project, which will initially provide
1.7 Bcf/d of capacity from the Haynesville Shale to the growing
Gulf Coast and LNG markets.
- Project includes carbon capture and sequestration component
that will remove 100% of the CO2 and permanently store it
underground, creating a net negative carbon footprint.
- Recently closed two significant acquisitions:
- Midcoast Energy’s East Texas business (“Midcoast ETX”), an
extensive gathering and transportation system with 1.5 Bcf/d of
current volume and 1.0 Bcf/d of existing deliverability to the Gulf
Coast and LNG markets.
- Align Midstream, which owns several gathering systems adjacent
to Midcoast with current volumes of 600 MMcf/d.
M6 Midstream (“Momentum” or “the Company”) today announced a
final investment decision (“FID”) on its new natural gas gathering
and carbon capture project, New Generation Gas Gathering (“NG3”),
which will gather natural gas produced in the Haynesville Shale for
re-delivery to premium Gulf Coast markets, including LNG export. In
addition, the Company completed the acquisitions of Midcoast
Energy’s East Texas business (“Midcoast ETX”) from an affiliate of
ArcLight Capital Partners, LLC and Align Midstream from Tailwater
Capital to establish a leading presence in the Haynesville
Shale.
With the final investment decision, the natural gas gathering
and carbon capture project will have an initial capacity of 1.7
Bcf/d and is expandable to 2.2 Bcf/d and will also capture and
permanently sequester up to 2.0 million tons per annum of CO2. The
project is expected to commence operations in the second half of
2024.
“With significant long-term volume commitments from several
leading Haynesville Shale producers, including Chesapeake Energy,
we are pleased to reach a positive FID on our new gathering and
treating project, which, combined with our existing capacity on the
Midcoast system, will serve to address bottlenecks in the
Haynesville Shale and provide much needed capacity to the growing
LNG markets on the Gulf Coast,” said Frank Tsuru, CEO of Momentum.
“Our customers are also excited to be part of the first of its kind
net negative gas gathering project.”
Mr. Tsuru added, “Consistent with our past business practices,
Chesapeake Energy’s anchor commitment for NG3 comes with an option
to own 35 percent of the project, creating alignment between
Momentum and one of the largest Haynesville Shale producers.”
With the combined assets of Midcoast ETX and Align Midstream,
Momentum is currently servicing volumes in excess of 2.0 Bcf/d
across a footprint including approximately 3,000 miles of gathering
pipelines, 1.5 Bcf/d of treating capacity, 700 MMcf/d of processing
capacity, 200,000 HP of compression and 820 miles of transportation
pipelines delivering gas to the Gulf Coast markets in southeast
Texas and the Carthage and Bethel markets in east Texas. The assets
serve a diverse customer base comprised of producers, utilities,
end-users and LNG exporters.
“Pairing the extensive footprints of the Midcoast and Align
assets with NG3, Momentum is able to relieve existing constraints
in the Haynesville Shale, particularly the Shelby Trough, and allow
our producer customers to reach premium Gulf Coast markets,” said
Brant Baird, President of Momentum. “We also provide these Gulf
Coast markets and LNG facilities with direct access to growing
Haynesville Shale production.”
“We have been closely associated with the management team at
Momentum for more than three decades and are incredibly proud to
help accelerate their plans to establish a leading presence in the
Haynesville Shale,” EFM Managing Partner and Founder Billy Lemmons
said. “EnCap Flatrock Midstream came alongside several proven
institutional energy investors in Yorktown Energy Partners, Martin
Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream
Partners and Blackstone Credit to support Momentum’s Haynesville
Shale growth plans.”
Terms of the transactions were not disclosed.
Advisors
Barclays served as exclusive financial advisor to Momentum on
the Midcoast ETX acquisition, and Barclays, Jefferies Finance LLC,
Blackstone Credit and Wells Fargo Securities, LLC arranged the
acquisition financing. Jefferies LLC served as exclusive financial
advisor to Momentum on the Align acquisition, and Vinson &
Elkins LLP served as legal counsel to Momentum on both the Midcoast
ETX and Align Midstream acquisitions.
Jefferies LLC and Latham & Watkins LLP advised ArcLight
Capital Partners, LLC on the sale of Midcoast. Piper Sandler &
Co and Locke Lord advised Tailwater Capital on the sale of Align
Midstream.
About Momentum
Momentum is an independent midstream energy company that
provides natural gas producers with flexible, responsive and
reliable services to link the wellhead to the market. Since 2004,
Momentum has developed or acquired more than 5,000 miles of
pipeline, 18 processing facilities, three NGL fractionation
facilities, over 1 million barrels of storage and approximately
500,000 horsepower of compression. The Company’s core focus is
building high-quality greenfield projects and acquiring natural gas
assets in growing U.S. basins that meet the emerging needs of its
customers. Momentum is backed by equity commitments from EnCap
Flatrock Midstream, Yorktown Energy Partners, Martin Sustainable
Resources, Ridgemont Equity Partners, Bengas Midstream Partners and
Blackstone Credit. For more information, please visit
https://www.momentummidstream.com.
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Kelly Kimberly Kelly.kimberly@fgsglobal.com 713.822.7538 Sara
Blair Gillette Sara.blair.gillette@fgsglobal.com 713.805.9663
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