THE WOODLANDS, Texas,
Dec. 30, 2019 /PRNewswire/ -- Summit
Midstream Partners, LP (NYSE: SMLP) announced today that it has
entered into agreements with TPG, a global alternative asset firm
("TPG"), for the purchase of up to $80
million of redeemable, preferred interests in Summit Permian
Transmission Holdco, LLC ("Permian Holdco"), a newly created,
unrestricted subsidiary of SMLP that indirectly owns SMLP's 70%
interest in Double E Pipeline, LLC ("Double E"). In connection
with the transaction, TPG will fund the next $80 million of Permian Holdco's capital calls
associated with Double E. The investment by TPG will be made by TPG
Energy Solutions ("TES"), the firm's energy-specific structured
equity vehicle.
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Upon receipt of Double E's Federal Energy Regulatory Commission
("FERC") 7(c) certificate, which is expected in the third quarter
of 2020, SMLP plans to raise a non-recourse commercial bank
financing to fund the substantial majority of the SMLP's remaining
capital obligations. In total, SMLP expects that the preferred
equity financing and the bank financing will cover more than 70% of
SMLP's $350 million funding
obligation associated with Double E.
Permian Holdco will pay a quarterly distribution rate of 7% on
the outstanding preferred units and has the option to pay this
distribution in-kind during the construction period. In
addition, Permian Holdco and TPG have agreed to certain features
that allow Permian Holdco to issue, and TPG to purchase, up to an
additional $60 million of preferred
units, under the same terms and conditions.
Permian Holdco has the right to optionally redeem TPG's
preferred interests at any time in whole or in part for
cash over the next seven years, subject to a predetermined
redemption price. SMLP will continue to lead the development,
permitting, and construction of Double E, and will operate the
pipeline upon commissioning.
Heath Deneke, President and
Chief Executive Officer of SMLP commented, "We are excited to
announce this new partnership with TPG, together with an attractive
financing plan for Double E. TPG's commitment to fund the next
$80 million of Summit's Double E
capital commitment creates significant financial flexibility and is
a credit enhancing transaction for SMLP. This transaction enables
SMLP to shift a significant amount of upcoming Double E capital to
third parties, thus freeing up cash in the near term to focus on
strengthening SMLP's balance sheet, while moving the project
forward. Further, we have preserved our upside to Double E
economics, given our option to redeem the preferred interests at
any time."
"Leveraging our expertise in the energy sector, TES seeks to
provide structured capital solutions for high-quality midstream
companies looking to finance the development of top tier, high
growth projects," said Christopher
Ortega, Partner at TPG. "Double E is an excellent fit for
this mandate. We are excited by the strategic positioning of the
pipeline, its expanding blue-chip customer base, and the strong
team and stakeholder group in place. We look forward to being part
of the next phase of development."
Double E is developing a 1.35 Bcf/d natural gas transmission
pipeline that will provide transportation service from multiple
receipt points in the Delaware
Basin to various delivery points in and around the Waha Hub in
Texas. Double E has secured
10-year take-or-pay volume commitments for a substantial majority
of its initial throughput capacity. Double E filed its section
FERC 7(c) certificate in July 2019, and estimates a third quarter
of 2021 in-service date, assuming timely receipt of the requisite
regulatory approvals.
About Summit Midstream Partners, LP
SMLP is a
growth-oriented limited partnership focused on developing, owning
and operating midstream energy infrastructure assets that are
strategically located in the core producing areas of unconventional
resource basins, primarily shale formations, in the continental
United States. SMLP provides natural gas, crude oil and
produced water gathering services pursuant to primarily long-term
and fee-based gathering and processing agreements with customers
and counterparties in six unconventional resource basins: (i) the
Appalachian Basin, which includes the Utica and Marcellus shale formations in
Ohio and West Virginia; (ii) the Williston Basin, which includes the Bakken and
Three Forks shale formations in North
Dakota; (iii) the Denver-Julesburg Basin, which includes the
Niobrara and Codell shale
formations in Colorado and
Wyoming; (iv) the Permian Basin,
which includes the Bone Spring and Wolfcamp formations in
New Mexico; (v) the Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (vi)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado. SMLP has an equity investment in and
operates Double E Pipeline, LLC, which is developing natural gas
transmission infrastructure that will provide transportation
service from multiple receipt points in the Delaware Basin to various delivery points in
and around the Waha Hub in Texas.
SMLP also has an equity investment in Ohio Gathering, which
operates extensive natural gas gathering and condensate
stabilization infrastructure in the Utica Shale in Ohio. SMLP is headquartered in The Woodlands, Texas.
About TPG
TPG is a leading global alternative asset
firm founded in 1992 with more than $119
billion of assets under management and offices in
Austin, Beijing, Boston, Dallas, Fort
Worth, Hong Kong,
Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New
York, San Francisco,
Seoul, and Singapore. TPG's investment platforms are
across a wide range of asset classes, including private equity,
growth equity, real estate, credit, and public equity. TPG aims to
build dynamic products and options for its investors while also
instituting discipline and operational excellence across the
investment strategy and performance of its portfolio. For more
information, visit www.tpg.com
Forward-Looking Statements
This press release
includes certain statements concerning expectations for the future
that are forward-looking within the meaning of the federal
securities laws. Forward-looking statements contain known and
unknown risks and uncertainties (many of which are difficult to
predict and beyond management's control) that may cause SMLP's
actual results in future periods to differ materially from
anticipated or projected results. An extensive list of
specific material risks and uncertainties affecting SMLP is
contained in its 2018 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on February 26, 2019, and as amended and updated
from time to time. Any forward-looking statements in this press
release, including forward-looking statements regarding 2019
financial guidance or financial or operating expectations for 2019,
are made as of the date of this press release and SMLP undertakes
no obligation to update or revise any forward-looking statements to
reflect new information or events.
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SOURCE Summit Midstream Partners, LP