Avista commits $176m to shale gas infrastructure

The private equity firm has made its first standalone infrastructure investment, agreeing to commit up to $176m in equity to the operator of a pipeline in Pennsylvania’s Marcellus Shale.

New York-based private equity firm Avista Capital Partners has agreed to commit up to $176 million to Appalachian Midstream Partners (AMP), operator of a pipeline in the Marcellus Shale. The investment expands the firm’s investments in shale gas.

AMP currently operates 56 miles of pipeline in north central Pennsylvania that provide access to “multiple major interstate pipelines,” according to a statement. The pipeline began operating in April and started providing gas transportation for Pennsylvania General Energy Company this month, Avista said.

Avista said AMP's pipeline could be expanded to access pipelines operated by Transco and Columbia Gas, among others.

In 2008, Avista dedicated up to $150 million to a joint venture with Houston-based Carrizo Oil and Gas in order to explore and develop assets in the Marcellus Shale. The firm exited part of its investment last year, selling 52,200 acres of its Marcellus Shale mineral rights to Mumbai, India-based Reliance Industries for $326.6 million, according to a previous statement.

But the commitment to AMP is Avista’s first standalone infrastructure investment, according to a spokesperson for the firm. Somerset Gas, an Ohio-based private operator of natural gas pipelines, also owns a stake in AMP.

”We believe the Marcellus Shale will continue to be an area of focus for exploration and production companies and this investment represents an attractive opportunity for us to meet the growing need for additional infrastructure in the region,” Steven Webster, co-managing partner at Avista, said in a statement.

Avista, which spun out of DLJ Merchant Banking in 2005, has offices in New York, Houston and London, and focuses on the energy, healthcare and media sectors, according to the firm’s website.