Partners Group, OPTrust pay $300m for US midstream stake

Unit Corporation sold 50% of its natural gas midstream business to bring in growth capital.

Swiss fund manager Partners Group and Canadian pension fund OPTrust have teamed up to buy a 50 percent stake in a US-based natural gas midstream business for $300 million.

Together, the investors purchased joint control in Superior Pipeline Company, a subsidiary of Unit Corporation, a listed energy company headquartered in Tulsa, Oklahoma. Unit will keep a 50 percent stake and continue to operate Superior Pipeline’s 13 processing plants, 22 gathering systems and 1,455 miles of pipeline. The company says Superior Pipeline can process 340 million cubic feet of natural gas per day and has assets in Oklahoma, Texas, Kansas, Pennsylvania and West Virginia.

US midstream assets have attracted increasing investments over the past few years as new technology has allowed for greater production at cheaper costs.

Partners Group, which manages a $10 billion infrastructure programme, has been looking to strengthen its US presence. In March, Infrastructure Investor reported that Vittorio Lacagnina, who has led Australian firm QIC’s fundraising efforts, will join Partners Group’s New York office in the next few months. The Swiss firm is also reportedly planning to launch a global infrastructure fund this summer targeting €1 billion.

For OPTrust, the investment gives the C$20 billion ($15.46 billion; €12.57 billion) Canadian pension fund more exposure in the energy infrastructure sector. In February, OPTrust acquired a 51 percent stake in Australian energy retailer Flow Power, one of the first companies to offer corporate renewable power-purchase agreements in the Australian market.

Founded in 1996, Unit said in a statement it plans to use the cash from this investment to grow Superior Pipeline as well as its upstream-focused subsidiaries.

“To some degree, the midstream business got deprived of some capital from time to time, which limited its growth to a degree,” Michael Earl, Unit’s vice president of investor relations, told Infrastructure Investor. He said this was a great opportunity to bring new capital contributors into the midstream business.