Alinda Capital Partners is forming a $1 billion joint venture with Regency Energy Partners and an affiliate of GE Energy Financial Services to finance and construct a pipeline in Northern Louisiana.
Alinda will pay $526.5 million in cash for a 50 percent stake in the Haynesville Expansion joint venture. GE will contribute $126.5 million in cash for a 12 percent stake. Regency will contribute its Regency Intrastate Gas System in North Louisiana, which it values at $400 million, for a 38 percent stake.
Alinda's commitment will come from its second fund, Alinda Capital Partners II, which is targeting $3 billion in commitments and has already held a first close toward that goal, according to data from placement agent Probitas Partners.
The joint venture will construct and operate three pipeline loops that will connect the Haynesville Shale with four other pipelines in the state.
Located in Northern Louisiana, the Haynesville Shale is estimated by many energy experts to be the largest natural gas field in the lower 48 US sates, with an estimated 250 trillion cubic feet of recoverable gas.
Regency said the joint venture will enable it to deleverage its balance sheet and push ahead with its business plan for the pipeline, which expects to be in-service by the end of 2009.
As a condition to the closing of the joint venture, Regency is amending its revolving credit facility and entering into a new $45 million unsecured revolving credit facility with GE. The proceeds may be used to pay for expenditures the company incurred on the Haynesville Expansion Project prior to establishing the joint venture.
Financial close is expected before 30 April.
Besides gas distribution and transmission projects, infrastructure fund manager Alinda Capital Partners invests in airports, roads, rail, water and wastewater assets. It manages two unlisted institutional funds with more than $5 billion in capital commitments.
Alinda Capital Partners I, its debut infrastructure fund, closed on $3 billion in 2007.
Alinda managing director Christopher Beale, Citigroup’s former global head of project finance, spun-out from the global banking giant in 2005 to form the New York-based firm.