First Infrastructure Capital Advisors has agreed to acquire a stake of 80% in the Agua Blanca pipeline, a natural gas residue pipeline in Texas, through two separate deals.
Image: First Infrastructure Capital to buy 80% stake in Texas' Agua Blanca pipeline. Photo: courtesy of outgunned21/Freeimages.com.
The Agua Blanca pipeline system, which serves the Delaware Basin, comprises nearly 144.8km of 36inch diameter pipeline and 112.6km of smaller diameter pipeline.
First Infrastructure Capital will acquire 60% stake in the pipeline system through the acquisition of WhiteWater Midstream for an undisclosed price. In this connection, the company has signed agreements with Denham Capital Management and Ridgemont Equity Partners, the financial sponsors of WhiteWater.
WhiteWater CEO Christer Rundlof said: “We are very excited about our new partnership with First Infrastructure Capital, who provides us with access to strong construction and operations expertise and access to significant capital to continue to expand the Agua Blanca system and execute other projects under development.
“WhiteWater is committed to continuing to partner with shippers in the Delaware Basin. Our new sponsor has a long investment horizon that will allow us to continue to manage the asset for the long term.”
The transaction, which is subject to customary approvals and closing conditions, is expected to be closed in the first quarter of 2019.
First Infrastructure Capital managing partner Dan Shapiro said: “WhiteWater has created a unique cornerstone infrastructure asset that maximizes natural gas take-away options for producers in the Delaware Basin.
“We look forward to working closely with the team to invest significant capital in expansions of the Agua Blanca system, other natural gas residue, natural gas liquids, and complementary energy infrastructure projects.”
In the second deal, First Infrastructure Capital has agreed to acquire WPX Energy’s 20% stake in the Agua Blanca pipeline. WPX Energy will continue to be a shipper on the pipeline.
The other stakeholders in the pipeline are MPLX’s subsidiary MarkWest Energy Partners and Targa Resources.
Commissioned in April 2018, the intrastate natural gas residue pipeline spans across parts of Culberson, Loving, Pecos, Reeves, Ward and Winkler counties.
The pipeline started with an initial capacity of around 1.4 Bcf/d, which is planned to be expanded in the future.
The Agua Blanca pipeline is backed by various, substantial, long-term, take or pay contracts. The pipeline system is said to have a multitude of direct downstream connections which offer its shippers access to various markets.