EnCap’s $300m deal continues US midstream activity

EnCap Flatrock Midstream has committed a $300 million equity cheque to oil and gas asset developer Greenfield Midstream as dealflow in the US energy infrastructure space increases.

Greenfield, which launched this year as a midstream developer based in Houston, is focused on infrastructure assets that service the North American oil and gas industry, according to a statement. The firm will make investments in natural gas and crude oil gathering and transportation, processing, treating and gas compression, as well as water handling and product marketing. The statement said Greenfield will make commit to “select acquisition opportunities” as well.

“Our goal is to develop midstream assets that are tailored to fit producer needs and maximise stakeholder value,” Greenfield chief executive Jeremy Ham said. “EnCap Flatrock brings the capital we need to move rapidly, strong financial acumen and a deep understanding of the development and operation of midstream assets.”

EnCap’s committed capital from its $3 billion EFM Fund III, which closed in 2014. The San Antonio-based private equity-firm invests in midstream infrastructure companies and assets in North America. EnCap launched in 2008 through a partnership between EnCap Investments and Flatrock Energy Advisors, and is currently managing around $6 billion of institutional capital.

The move comes amid an uptick in deal activity in the North American energy space. In June, Alinda Capital Partners sold the Houston Fuel Oil Terminal Company to Tulsa-based SemGroup for $2.1 billion. EnCap previously committed $250 million and $200 million to two midstream companies in May, and it sold EagleClaw Midstream Ventures, one of the largest natural gas pipeline operators in West Texas, to The Blackstone Group in a $2 billion deal in April.