Wren House Infrastructure Management has agreed to acquire North Sea Midstream Partners (NSMP), a UK midstream company, from ArcLight Capital Partners for an undisclosed price.
The UK midstream company, which was formed in 2012 by ArcLight, has stakes in four natural gas transportation and processing assets located in and around the North Sea.
One of the assets is the 234km long Shetland Island Regional Gas Export System pipeline (SIRGE) pipeline, in which it has a stake of 67%. The SIRGE pipeline supplies natural gas sourced from the West of Shetland basin.
NSMP has a stake of 100% in the 362km long Frigg UK pipeline (FUKA) that transports gas from the SIRGE pipeline and also from various fields across the Northern and Central North Sea.
Apart from the two pipelines, the UK midstream company holds 100% stakes in the associated St. Fergus Gas Terminal (SFGT) and the Teesside Gas Processing Plant (TGPP).
NSMP bought its stakes in the FUKA and SIRGE gas pipelines and SFGT from Total in 2015 for £585m.
NSMP CEO Andy Heppel said: “We thank ArcLight for their significant support over the past six years and look forward to working with Wren House Infrastructure in continuing to grow our business and in providing essential gas transportation and processing services to all our customers.
“The combination of NSMP’s great base business with Wren House’s financial expertise and commitment to operational excellence will be the trigger for continued development of the NSMP infrastructure in the North Sea.”
Wren House said that it was drawn to NSMP’s core infrastructure characteristics with a robust revenue stream supported by long-term contracts along with its diversification across multiple North Sea gas basins.
The infrastructure investor further said that the UK midstream company is a key addition to its global infrastructure investment portfolio, which includes other key UK infrastructure assets and other investments in firms in Spain, Latin America, Australia and Turkey.
Wren House managing director Hakim Drissi Kaitouni said: “NSMP’s catchment areas, in particular the West of Shetland basin, represent one of the most promising areas in terms of exploration and future developments.
“Our deep experience in energy infrastructure, operational expertise and financial strength make Wren House uniquely qualified to acquire NSMP.”
The acquisition, which will be subject to receipt of customary merger clearance, is anticipated to be closed this year.