First Reserve has signed an agreement with SK Holdings, for an investment of $300m into a fully integrated midstream company Blue Racer Midstream.


Image: Blue Racer is a portfolio holding of First Reserve Fund XIII. Photo courtesy of rawpixel/Pixabay.

In December 2018, First Reserve has acquired a 50% interest Blue Racer Midstream, which holds assets in the Utica and Marcellus Shale plays.

Blue Racer is a portfolio holding of First Reserve Fund XIII, funded in part by equity from First Reserve Fund XIII and company’s affiliated investment funds.

Apart from formation of a strategic relationship with energy investor First Reserve, the present investment into the Blue Racer represents a sizeable addition to SK’s North American midstream platform.

First Reserve president & CEO Alex Krueger said: “With over 35 years’ experience as energy-focused investors, First Reserve has developed what is in our view a deep understanding of the global energy value chain, energy operations, and the key centers of energy activity.

“We believe Blue Racer is a well-positioned business in a growing market, and we are excited to welcome SK as a strategic investor in the company.  We believe this partnership will serve as a strong complement to our expertise, and we deeply value the experience that SK will bring to the Blue Racer investment.

SK Holdings has a diverse portfolio of investments focused on driving competitive, long-term shareholder value in energy sector and other key growth industries.

First Reserve said that, as a strategic investor, SK Holdings would work alongside the company to support the Blue Racer’s growth and initiatives to expand its regional footprint.

SK Holdings CEO Dong Hyun Jang said: “SK has built a substantial platform of energy investments throughout North America, providing what we believe is a robust investment foothold in an energy epicenter.

“This investment in Blue Racer and the partnership with First Reserve, a leading global private energy investment firm, are a continuation of that investment thesis – and the opportunity to combine our strategic expertise with experienced energy players.”

Blue Racer owns, operates, and develops midstream assets in the Utica and Marcellus Shale plays in the US and provides interconnected midstream functionalities with more than 1126.5km of gathering pipeline and 1 billion cubic feet per day of cryogenic processing capacity.

Krueger added: “We look forward to a long-term relationship with the SK organization as we seek to drive growth on behalf of both Blue Racer and our stakeholders.”

With strategically located assets and contractual relationships with material customers, Blue Racer is expected to retain and grow its position as a major midstream company serving customers in the Appalachian basin.

Jang added: “We believe Blue Racer is a premier midstream operator, and we look forward to helping build value through our energy business capabilities and synergy with shale-related assets in the U.S.”