Frontera Energy buys Colombian asset operator in $225m deal

Frontera Energy has fully acquired a midstream asset operator in Colombia in a $225 million deal that extends the Canadian oil company’s strategy in Latin America.

Frontera, based in Toronto, purchased a 36.6 percent stake in Pacific Midstream from the International Finance Corporation. The deal gives Frontera full ownership of a company operating a network of oil transportation and storage systems in Colombia’s burgeoning energy sector.

Gabriel de Alba, Frontera chairman, called the investment a “strategic acquisition” that will service the company’s other energy and power assets in Colombia. Frontera fully owns a power utility in Colombia as well as stakes in two others.

“This initiative is important for Frontera as we look to right-size our transportation costs,” the company’s chief executive Barry Larson added.

Frontera’s move is capitalising on energy reforms taking place in Colombia and other Latin American markets where governments are opening their oil and gas sectors to private investment. The need for midstream assets is following a trend in North America, which has seen an active market for pipelines and storage terminals.

Some of the year’s big deals include Global Infrastructure Partners agreeing this month to purchase the largest privately held crude oil transportation system in the Midland Basin of West Texas in a deal worth $1.82 billion.

In August, Blackstone purchased Harvest Fund Advisors, a firm focused on master limited partnerships and US midstream assets, and paid $1.57 billion for a 49.9 percent stake in a pipeline. In June, Alinda Capital Partners sold the Houston Fuel Oil Terminal Company to SemGroup for $2.1 billion.