Stonepeak’s $3.6bn Oryx deal deepens firm’s US midstream exposure

The deal is the fund manager’s second in the sector since the close of its $7.2bn infra fund last year.

Stonepeak Infrastructure Partners has increased its portfolio’s exposure to the US energy sector with a $3.6 billion deal to acquire an oil pipeline company operating in the Permian Basin in western Texas and New Mexico.

The New York-based fund manager agreed to purchase Oryx Midstream from a group of energy investors including Quantum Energy Partners, Post Oak Energy Capital, Concho Resources and WPX Energy. The deal includes a $1.5 billion debt vehicle provided by a Barclays-led consortium of lenders.

Oryx operates a network of pipelines spanning 1,200 miles and storage terminals capable of holding 2.1 million barrels. It is currently constructing oil pipelines that will boost its service capacity to 900,000 barrels per day.

Oryx is “well-positioned to capitalise on growing production,” according to a statement. The US Energy Information Administration reported that this year oil production in the country had reached an all-time high of 12 million barrels per day.

According to the statement, Oryx will retain its name and its headquarters in the city of Midland in western Texas. Its leadership team – headed by Brett Wiggs and Karl Pfluger, who are investing alongside Stonepeak in the transaction – are to remain in their current roles.

Stonepeak manages $15 billion in assets and has raised three infrastructure funds since launching in 2011. Seven of the firm’s 20 investments from Fund I and Fund II were midstream assets. Stonepeak has also invested in the power, communications, transport, utility and water sectors.

Last July, the New York-based fund manager closed its third vehicle on $7.2 billion, the second-largest infrastructure fund to be raised in 2018. The firm has signed two midstream deals thus far: the Oryx purchase and a $1.1 billion joint venture with Houston-based midstream energy company Targa Resources. Stonepeak also announced an investment last year in cold-storage transportation company Linear Logistics.

Stonepeak did not respond to a request for comment.