DTE Buys Momentum And Indigo
DTE buys Momentum and Indigo.
DTE Energy buys M5 Louisiana Holdings from Momentum Midstream and Indigo Natural Resources for $2.25 billion.
Momentum and Indigo are a gathering system and gathering pipeline in the Haynesville Shale formation of Louisiana. They gather natural gas produced in the Haynesville Basin and access major downstream pipelines, including those serving the Gulf Coast. Assets are an existing gathering system and a 150-mile gathering pipeline under construction. They’re fully contracted, with 13.5 years residual for the existing gathering system, and a 10-year contract for the gathering pipeline under construction.
DTE Midstream provides natural gas storage, 1,900 miles of pipeline, and gathering services across the Midwest, Appalachia, Northeast, and Ontario. They have a proven track record of creating value in various basins stretching back 30 years. Firstly, in the Michigan producing basins, then the Texas Barnett Shale, and lately in the Appalachian basin. Haynesville offers DTE the opportunity to create substantial value with its midstream assets in a high-quality basin.
Jerry Norcia of DTE Energy said: ‘DTE's non-utility operations continue to grow, perform well, and fit nicely into our planned utility and non-utility mix. This acquisition enhances the strength and diversity of DTE Midstream, adding premium assets in one of the fastest growing and best positioned US shale formations. The successful operation of the Link asset, also purchased from Momentum, demonstrates the operating ability and value creation DTE Midstream brings to this new system. Also, the company gains a strong commercial partner in Indigo, one of the nation's largest private natural gas producers supplying the growing demand in the Gulf Coast region.
The US is undergoing a fundamental shift toward clean energy, and natural gas will play a large role in that. Large investments in renewable resources and natural gas infrastructure enable the shift to a cleaner energy future. This acquisition is highly accretive, has world-class resources, has access to large markets, and is in the early- to mid-cycle development phase. It checks all of our boxes.’
David Slater of DTE Midstream said: ‘This deal is partly fueled by demand for feedstock going into liquefied natural gas facilities cropping up on the Gulf Coast, along with increasing demand from natural gas power producers. There’s robust demand down here in this region. We believe this suite of assets is well-positioned to serve those growing demand centers.’
Momentum’s main equity sponsor is Yorktown Partners.
Barclays served as financial adviser to DTE Energy. Shearman & Sterling and Dechert served as legal advisers.
Jefferies and Credit Suisse served as financial advisers to Momentum. Vinson & Elkins served as legal adviser.
DTE Energy buys M5 Louisiana Holdings from Momentum Midstream and Indigo Natural Resources for $2.25 billion.
Momentum and Indigo are a gathering system and gathering pipeline in the Haynesville Shale formation of Louisiana. They gather natural gas produced in the Haynesville Basin and access major downstream pipelines, including those serving the Gulf Coast. Assets are an existing gathering system and a 150-mile gathering pipeline under construction. They’re fully contracted, with 13.5 years residual for the existing gathering system, and a 10-year contract for the gathering pipeline under construction.
DTE Midstream provides natural gas storage, 1,900 miles of pipeline, and gathering services across the Midwest, Appalachia, Northeast, and Ontario. They have a proven track record of creating value in various basins stretching back 30 years. Firstly, in the Michigan producing basins, then the Texas Barnett Shale, and lately in the Appalachian basin. Haynesville offers DTE the opportunity to create substantial value with its midstream assets in a high-quality basin.
Jerry Norcia of DTE Energy said: ‘DTE's non-utility operations continue to grow, perform well, and fit nicely into our planned utility and non-utility mix. This acquisition enhances the strength and diversity of DTE Midstream, adding premium assets in one of the fastest growing and best positioned US shale formations. The successful operation of the Link asset, also purchased from Momentum, demonstrates the operating ability and value creation DTE Midstream brings to this new system. Also, the company gains a strong commercial partner in Indigo, one of the nation's largest private natural gas producers supplying the growing demand in the Gulf Coast region.
The US is undergoing a fundamental shift toward clean energy, and natural gas will play a large role in that. Large investments in renewable resources and natural gas infrastructure enable the shift to a cleaner energy future. This acquisition is highly accretive, has world-class resources, has access to large markets, and is in the early- to mid-cycle development phase. It checks all of our boxes.’
David Slater of DTE Midstream said: ‘This deal is partly fueled by demand for feedstock going into liquefied natural gas facilities cropping up on the Gulf Coast, along with increasing demand from natural gas power producers. There’s robust demand down here in this region. We believe this suite of assets is well-positioned to serve those growing demand centers.’
Momentum’s main equity sponsor is Yorktown Partners.
Barclays served as financial adviser to DTE Energy. Shearman & Sterling and Dechert served as legal advisers.
Jefferies and Credit Suisse served as financial advisers to Momentum. Vinson & Elkins served as legal adviser.
Kirkland & Ellis served as legal adviser to Indigo.
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