The Board of Directors has reached the Final Investment Decision on the Next Generation Gas Capture project, which will initially provide 1.7 Bcf/d capacity to the growing Gulf Coast and LNG markets from the Haynesville Shale.
It recently closed two major acquisitions:
Midcoast Energy’s East Texas business (“Midcoast ETX”) is a comprehensive pick and transport system with 1.5 Bcf/d current volume and 1.0 Bcf/d current delivery to the Gulf Coast and LNG markets.
Align the Midstream with several collection systems adjacent to the midcoast and their current volume is 600 MMcf/d.
HOUSTON, September 22, 2022–(BUSINESS WIRE)–M6 Midstream (“Momentum” or “Company”) today announced its final investment decision (“FID”) for its new natural gas capture and carbon capture project, Next Generation Gas Collection (“NG3”). ) will collect natural gas produced at the Haynesville Shale for redelivery to premium Gulf Coast markets, including LNG exports. In addition, the Company acquired Midcoast Energy’s East Texas business (“Midcoast ETX”) from a subsidiary of ArcLight Capital Partners, LLC and Align Midstream from Tailwater Capital to establish a leading presence in the Haynesville Shale.
With the final investment decision, the natural gas capture and carbon sequestration project will have an initial capacity of 1.7 Bcf/d and expandable to 2.2 Bcf/d, as well as capture and permanently sequester up to 2.0 million tons of CO2 per year. The project is expected to be operational in the second half of 2024.
“With significant long-term volume commitments from leading Haynesville Shale manufacturers, including Chesapeake Energy, coupled with our existing capacity in the Midcoast system, we are pleased to achieve a positive FID on our new collection and treatment project. Frank Tsuru, CEO of Momentum, said: “To address bottlenecks and provide much-needed capacity to the growing LNG markets on the Gulf Coast.” “Our customers are also excited to be a part of the first-of-its-kind net negative gas collection project.”
“Consistent with our past commercial practices, Chesapeake Energy’s anchor commitment for NG3 comes with the option to own 35 percent of the project, creating a fit between Momentum and one of the largest Haynesville Shale manufacturers,” said Mr. Tsuru.
With the combined assets of Midcoast ETX and Align Midstream, Momentum currently has approximately 3,000 miles of aggregate pipeline, 1.5 Bcf/d processing capacity, 700 MMcf/d processing capacity, to the Gulf Coast markets in Southeast Texas and the Carthage and Bethel markets in east Texas. 200,000 HP compression and 820 miles of transport pipeline supplying gas. The assets serve a diverse customer base of manufacturers, utilities, end users and LNG exporters.
“Matching the extensive footprints of Midcoast and Align assets with NG3, Momentum is able to ease current restrictions on the Haynesville Shale, particularly the Shelby Trough, allowing our producer customers to access premium Gulf Coast markets,” said Brant Baird. Push. “We also provide direct access to these Gulf Coast markets and LNG facilities, growing Haynesville Shale production.”
EFM Managing Partner and Founder Billy Lemmons said, “We have been closely associated with the management team at Momentum for over three decades and are incredibly proud to accelerate their plans to establish a leading presence in the Haynesville Shale.” said. “EnCap Flatrock Midstream has come up with several established institutional energy investors at Yorktown Energy Partners, Martin Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream Partners and Blackstone Credit to support Momentum’s Haynesville Shale growth plans.”
The terms of the transactions were not disclosed.
Barclays served as exclusive financial advisor to Momentum on the Midcoast ETX acquisition, and Barclays, Jefferies Finance LLC, Blackstone Credit, and Wells Fargo Securities, LLC arranged the acquisition financing. Jefferies LLC served as exclusive financial advisor to Momentum on the Align acquisition, and Vinson & Elkins LLP served as legal counsel to Momentum on both the Midcoast ETX and Align Midstream acquisitions.
Jefferies LLC and Latham & Watkins LLP advised ArcLight Capital Partners, LLC on the sale of Midcoast. Piper Sandler & Co and Locke Lord advised Tailwater Capital on the sale of Align Midstream.
Momentum is an independent midstream energy company that provides flexible, responsive and reliable services to natural gas producers to connect the wellhead to the market. Since 2004, Momentum has developed or purchased more than 5,000 miles of pipelines, 18 processing plants, three NGL separation plants, over 1 million barrels of storage and nearly 500,000 horsepower compression. The company’s main focus is building high-quality greenfield projects and purchasing natural gas assets that meet the emerging needs of its customers in growing US watersheds. Momentum is backed by equity commitments from EnCap Flatrock Midstream, Yorktown Energy Partners, Martin Sustainable Resources, Ridgemont Equity Partners, Bengas Midstream Partners and Blackstone Credit. For more information, please visit https://www.momentummidstream.com.
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Sara Blair Gillette