Partners Group has acquired a majority stake in Fermaca, a Mexican gas pipeline business, for $750 million.
Fermaca builds, owns and operates gas pipelines as well as other energy assets in Mexico. Its current network is capable of shipping around 1.2 billion MMBtu/day, equivalent to 20 percent of Mexico’s natural gas needs. The bulk of Fermaca’s capacity is contracted under long term agreements.
“You have very cheap shale gas in the US and very expensive gas in Mexico, and the only way to bring it cheaply from one place to the other is to build pipelines. Therefore those assets are very strategically important for the country,” Jean Perarnaud, managing director at Partners Group, told Infrastructure Investor.
Partners Group expects the business to benefit from the Mexican Energy Reform, approved last December, which allows private investment in the country’s oil and gas sectors for the first time since 1938.
“Timing was good because the energy reforms that have been spoken about for years – about the dismantling of the oil and gas monopoly of Pemex and CFE – are finally being passed. That was part of our upside but they actually turned out to be better than we envisaged,” Perarnaud said.
Switzerland-headquartered Partners Group was founded in 1996 and has more than €30 billion in assets under management in private equity, real estate and infrastructure. Its Latin American practice operates out of Partners Group’s Sao Paulo office, which opened in 2011.
In October 2013, the firm raised $716.46 million for its latest infrastructure fund of funds vehicle, Partners Group Global Infrastructure 2012. The fund is also an active direct and secondary investor.
Additional reporting by Chelsea Stevenson