First Reserve Corporation will invest up to $500 million in Century Midstream, a newly formed oil and gas gathering and processing company targeting assets in North America.
Houston-based Century will focus primarily on the development, acquisition and expansion of gathering and processing assets with an emphasis on emerging liquids and liquids-rich shale projects. The company is led by four oil and gas industry veterans who previously worked together providing gathering and processing services for oil and gas companies in the Marcellus and Utica Shale regions.
First Reserve was unavailable for comment at press time.
The firm is targeting $5 billion for its Fund XIII, according to documents filed in April with the US Securities and Exchange Commission. The figure included in the filings may represent a revised target, as two sources who heard the original fund launch announcement last year previously told Private Equity International the firm would seek $6 billion. It is unclear whether Fund XIII has a hard cap.
The energy investor’s latest fund is targeting roughly half the size of its previous fund, which collected $9 billion on a $12 billion target in 2009. Limited partners in First Reserve’s Fund XIII include the Washington State Investment Board, which committed up to $400 million in 2012, according to pension documents.
In addition to exploration and production assets, oil and gas gathering and processing companies have proven to be particularly attractive targets for energy funds and other private equity firms in recent years thanks in part to new drilling technologies that have led to increased oil and gas production in the US and abroad.
Last month, The Carlyle Group hired six professionals to form an international energy investment team to focus on oil and gas exploration and production, gathering and processing, oil field services and refining and marketing in Europe, Africa, Latin America and Asia.
First Reserve was founded in 1983 and has raised about $23.1 billion since inception. The firm last year closed its debut infrastructure fund on $1.2 billion.