Riverstone Holdings, a private equity firm focused on the power and energy sectors, has agreed to commit up to $300 million to Meritage Midstream Services III, a limited partnership that will provide oil and gas producers with a range of midstream services and initially target Western Canada.
Riverstone will fund the initial $100 million commitment with capital from Riverstone Global Energy and Power Fund VI (for $67 million) and from Riverstone Energy Limited (for $33 million), the same two vehicles it used to invest $500 million in Meritage Midstream Services II LLC, a company providing services to oil and gas producers in the Permian Basin, Powder River Basin, Eagle Ford Shale and Unitah Shale plays.
Riverstone did not say whether it would use those same two vehicles for the other $200 million it may commit to Meritage III and declined to comment further through a spokesperson.
“We are excited to expand our relationship with Riverstone and look forward to developing another midstream company together,” Steve Huckaby, chairman and chief executive of Meritage Midstream II and III, said in a statement. “Our goal is to create a leading Western Canada-focused midstream company that provides the flexibility and optionality producers need to bring their hydrocarbon products from the wellhead to the most profitable markets.”
The range of services Meritage will provide through this new partnership include the gathering, compression, treating, processing, fractionation, transportation and marketing of natural gas, natural gas liquids (NGLs) and condensate; as well as crude oil gathering, blending, storage, transportation and marketing.
“Our significant equity commitment to Meritage III reflects our confidence in Steve, Nick and the team they have assembled, as well as the opportunity set we see in Western Canadian midstream,” Riverstone partner Baran Tekkora said, referring to Huckaby and Nicholas Thomas, the president of Meritage III.
Founded in 2009 to pursue midstream opportunities in emerging resources, Meritage Midstream is based in Denver, Colorado.
Riverstone, headquartered in New York and established in 2000, has raised $29 billion of equity capital and has committed approximately that amount to over 110 investments in North America, Latin America, Europe, Africa and Asia.
The firm conducts buyout and growth capital investments in the exploration and production, midstream, oilfield services, power and renewable sectors.