TSSP joins other PE firms in Permian Basin pipeline grab

The credit platform for TPG invested in a company operating pipelines that supply CO2 for enhanced oil recovery drilling.

A subsidiary of TPG is the latest private equity firm this month to invest in pipelines servicing the energy-rich Permian Basin, acquiring a stake in a company providing CO2 to drillers using enhanced oil recovery.

TPG Special Situations Partners (TSSP), the firm’s credit investment platform managing assets worth $20 billion, completed an investment for an undisclosed amount in Trinity Midstream, according to a statement. The deal makes TSSP the largest capital provider in Trinity and creates a joint venture with its parent company, Trinity CO2.

Based in Midland, Texas, near the oil-rich Permian Basin, Trinity Midstream owns and operates 185 miles of CO2 pipeline in West Texas and New Mexico, as well as CO2 reserves. The gas is used to push to the surface any residual oil left behind in depleted wells.

Trinity CO2, also based in Midland, will become a transportation and supply customer of Trinity Midstream, the statement said.

TPG is the latest in a string of deals this month from large private equity firms buying pipelines serving the oil and gas industry in the Permian Basin. Earlier this week, The Blackstone Group agreed to pay $2 billion for gas pipeline operator EagleClaw Midstream Ventures, and last week, NuStar Energy bought oil transportation company Navigator Energy from First Reserve for $1.47 billion.

“Trinity Midstream provides critical services to an attractive, low cost area of oil production under long-term contracts, creating a strong foundation to grow the business,” TSSP managing director James Brower said. He added the firm expects to deploy “additional infrastructure capital in the region in coming years”.

TPG has also been increasing its focus on infrastructure this year, hiring former European head of Macquarie Infrastructure and Real Assets Edward Berkley in February. Berkley was hired to work across TPG’s funds to source infrastructure investments globally.