Blackstone’s GWDP to develop water infra for Pemex

The buyout firm’s water development platform has signed a memorandum of understanding with the Mexican state-owned oil company to develop water and wastewater infrastructure for Pemex’s facilities.

Global Water Development Partners (GWDP), a company founded by private equity funds managed by The Blackstone Group (Blackstone), has entered into an agreement with Pemex to develop and invest in water and wastewater infrastructure for the state-owned oil and gas company’s upstream and downstream facilities in Mexico.

“In addition to providing a source of financing, the partnership will facilitate access to the industry’s most advanced technology and integrated full-service water systems for all of Pemex’s water supply and wastewater treatment needs at both its onshore and offshore oil production facilities, refineries and petrochemical plants,” said Jose Manuel Carrera, general director of PMI, which manages crude and oil product imports and exports for Pemex, its parent.

The Pemex-GWDP partnership will accelerate Pemex’s efforts to design, implement and finance critical solutions for its oil and gas water and wastewater treatment operations, according to a statement.

The partnership further confirms Blackstone’s interest in Mexican oil and gas assets. The New York-based private equity firm has already invested in the country’s infrastructure sector with the development of Ventika, a 252-megawatt (MW) wind farm project that will be the largest in Mexico once completed in 2016.

That investment was made through Fisterra Energy, another company created in 2014 by Blackstone along with a management team led by Pedro Barriuso, former executive chairman of Element Power and former head of Iberdrola Renewables.

Blackstone is one of a number of private equity firms that have been investing in Mexico’s oil and gas industry since the sector was liberalised by the administration of current President Enrique Peña Nieto.

BlackRock and First Reserve teamed up in March to acquire an approximate 45 percent equity stake in the Los Ramones II projects, two natural gas pipelines belonging to a PEMEX subsidiary, for about $900 million.

A week later, Connecticut-based First Reserve, which focuses exclusively on the energy sector, said it had inked another agreement with Pemex to jointly invest $1 billion dollars in the country’s energy infrastructure sector.

While neither company provided a timeframe for doing so, a spokesperson for First Reserve told Infrastructure Investor at the time that “both organisations are already looking at a pipeline of near-term opportunities which exceeds the $1 billion commitment.”

Blackstone’s energy-focused unit, Blackstone Energy Partners, launched GWDP in March 2014 to serve as a water infrastructure development platform. Its mission is to provide companies with critically needed capital to create long-term and sustainable water facilities – including water desalination plants and wastewater treatment facilities for industrial customers – as well as to identify, develop, finance, construct and operate large-scale independent water development projects globally.

The agreement with Pemex represents GWDP's first deal, a spokesperson for Blackstone told Infrastructure Investor.

GDWP is led by Usha Rao-Monari, former global head of the International Finance Corporation’s (IFC) water and wastewater division, and Lars Thunell, former chief executive of the IFC.

To date, Blackstone Energy Partners has invested approximately $8 billion of equity globally within the energy sector. In February, Blackstone closed its second energy fund, Blackstone Energy Partners II (BEP II), on $4.5 billion, beating its hard cap.

In addition to energy, the New York-listed investment firm invests in private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds. Blackstone currently has approximately $300 billion in assets under management.