US-based midstream company Williams has agreed to acquire the gathering and processing assets of Trace Midstream in the Haynesville shale region in the US for $950m.
Trace Midstream’s Haynesville assets include the Gemini Carthage pipeline (GCP) system, Endeavor gathering system, and Star gathering system.
The gathering and transmission pipeline systems traverse the Panola and Harrison counties in East Texas and certain parishes in Louisiana. These include over 386km of high and low-pressure pipelines along with various treating and dehydration facilities.
Trace Midstream is a portfolio company of Quantum Energy Partners.
Trace Midstream CEO Josh Weber said: “Over the past four years, we have positioned ourselves in one of the most prolific resource plays in the country to transport responsibly sourced natural gas to premium markets along the Texas and Louisiana Gulf Coast.
“Our safe, reliable, and competitive midstream services are what our producer customers have come to expect, and we are confident that Williams will continue to be a good steward of these assets.”
Through the deal, Williams will boost its gathering capacity in the Haynesville basin from 1.8 billion cubic feet (Bcf/d) to more than 4Bcf/d.
As part of the deal, Rockcliff Energy, which is a customer of Trace Midstream and an affiliate of Quantum Energy Partners, has agreed to a long-term capacity commitment to underpin Williams’ Louisiana Energy Gateway (LEG) project.
According to Williams, the LEG project can gather natural gas produced in the Haynesville and transport it to premium Transco markets as well as meet rising industrial and liquefied natural gas (LNG) export demand along the Gulf Coast.
For additional support of the LEG project, Williams and Quantum Energy Partners have signed a memorandum of understanding to create a joint venture to enable the latter to become an equity investor and partner in the midstream project.
Williams president and CEO Alan Armstrong said: “Williams continues to increase scale and connectivity in the best and most efficient natural gas basins, and these transactions with Trace, Rockcliff and Quantum represent an important extension of our natural gas-focused strategy.
“We are excited for the opportunity to help Rockcliff continue their success and connect them to growing markets with Quantum as our new partner in LEG.
“Importantly, this is going to be the flagship of our low carbon wellhead to water venture, proving up what an important role natural gas can play in reducing emissions, lowering costs and providing secure reliable energy here and around the world.”
The deal, which is subject to regulatory approvals, is expected to be completed in Q2 2022.
