PE funds form gas infrastructure joint venture

Private equity firms Tenaska Capital Management and Energy Spectrum Partners V have teamed up to form a natural gas infrastructure joint venture.

Frontier Gas Services will be focused on the acquisition, development, ownership and operation of midstream natural gas infrastructure. It will concentrate on assets primarily located in the Mid-Continent, Permian Basin, East Texas and unconventional shale plays across the US.

New venture: Frontier Gas Services

Tenaska Capital Management is manager of the $2.4 billion TPF II private equity fund and an affiliate of Tenaska Energy, while Energy Spectrum Partners V is a private equity fund focused on midstream investments. The two private equity firms will back midstream gas manager and operator Frontier Energy Services, which will take charge of the day-to-day management and investment origination of the venture.

The TPF II fund and Energy Spectrum Partners V will be majority shareholders in the joint venture, and are expected to make a combined investment in Frontier Gas Services of at least $250 million. In addition to managing the new enterprise, Frontier Energy Services will also hold a stake in the venture.

As part of the capitalisation of the new venture, Energy Spectrum Partners V and Frontier Energy Services are set to contribute a natural gas processing facility in Roberts County, Texas, from their existing Frontier Midstream partnership.
 
To date, the venture's management company Frontier Energy Services has invested more than $500 million in midstream natural gas investments.