First Reserve in $375m Marcellus Shale deal

A partnership created by First Reserve Corporation has bought a natural gas gathering system in Marcellus Shale for $375m.

A joint venture formed by First Reserve Corporation has made a $375 million deal for a gathering system in Marcellus Shale, according to a press statement.

Crestwood Midstream Partners, established with a $300 million commitment from First Reserve, bought the gathering system from Antero Resources Appalachian Corporation, a Denver oil and natural gas company. 

First Reserve in a May 2010 joint venture with Crestwood Holdings Partners started Crestwood Midstream Partners, a Houston-headquartered master limited partnership (MLP) focused on midstream energy.

The gathering system, or natural gas pipeline and transportation network, is located in West Virginia. Former owner Antero has a geographic focus on the Appalachian Basin between West Virginia and Pennsylvania.

In its statement, Michael France, managing director of First Reserve, called the acquisition a “milestone” for Crestwood. A request for additional comment from First Reserve was refused.

First Reserve has been tapping into the Marcellus Shale phenomenon via partner businesses.

In October, the energy focused private equity firm formed a natural gas gathering operation with Energy Corporation of America to access Marcellus Shale in Pennsylvania, with managing director Mark Florian characterising the resource to Infrastructure Investor as “huge” and “new”.

Shale has fast become a rising source of energy, with the potential to account for half of the natural gas in North America by 2020. Gathering, as well as processing and storage, round out the role energy infrastructure has in the production of shale gas.

First Reserve is a private equity firm founded in 1984 and based in Greenwich, Connecticut. The firm launched its debut energy infrastructure fund in 2011, which closed with $1.2 billion in May. First Reserve has $23 billion overall under management.