[Context: On November 9, BlackRock Inc.’s Global Energy and Power Infrastructure Fund partnered with Navigator Energy Services to acquire Glass Mountain Pipeline for $600m from 50/50 joint venture partners NGL Energy Partners LP (NYSE: NGL) and SemGroup Corporation (NYSE:SEMG). Navigator Energy sold Delaware basin midstream assets to NuStar Energy (NYSE: NS) for $1.475 billion in May. It was previously backed by First Reserve but in February 2017 First Reserve sold it midstream portfolio to BlackRock for $3.7bn. Further details and related links are below.]
NGL Energy Partners LP and SemGroup Corporation announce agreement to sell interests in Glass Mountain Pipeline, LLC to BlackRock Inc. GEPI Fund and Navigator Energy for $300 Million
November 09, 2017–NGL Energy Partners LP (NYSE: NGL) (the “Partnership” or “NGL”) and SemGroup Corporation (NYSE:SEMG) announced today they had entered into definitive agreements with an affiliate of BlackRock Inc.’s Global Energy and Power Infrastructure Fund (“GEPIF”) in partnership with Navigator Energy Services to sell both their 50% interests in Glass Mountain Pipeline, LLC (“Glass Mountain” or “GMP”) for total consideration of $300 million each, or a total of $600m.
Glass Mountain Pipeline, LLC is a joint venture owned equally between SemGroup Corporation and NGL Energy Partners LP. SemGroup subsidiary Rose Rock Midstream serves as the pipeline operator.
The sale is expected to close prior to December 31, 2017, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.
Glass Mountain is a fully integrated, multi-play crude transportation system in Oklahoma, which services the STACK/Merge, Granite Wash and Mississippi Lime plays and delivers crude oil to one million barrels of GMP-owned storage at Cushing, Oklahoma. GMP completed construction of the original, approximately 215-mile system and began commercial operations in April 2014.
An approximately 44-mile extension into the STACK was announced in December 2016, and is expected to be complete by calendar year-end 2017 and operational in early 2018. Once the STACK extension is completed, the system would include pipeline capacity of approximately 210,000 barrels of oil per day and approximately 1.8 million barrels of storage, including 1.0 million barrels located in Cushing, Oklahoma. The pipeline is supported by long-term agreements with producers, including both take-or-pay and area dedications.
“We are very excited to build upon the foundation that NGL and SemGroup have successfully established in Glass Mountain,” said Matt Vining, CEO of Navigator Energy Services. “Glass Mountain represents a unique opportunity to enter an exciting resource play and continue NGL’s and SemGroup’s customer-focused approach to providing safe crude oil midstream services. We look forward to engaging with our customers and commercial partners as we embark on a new phase of growth.”
“By partnering with the Navigator Energy Services management team in the acquisition of Glass Mountain, we look forward to delivering our clients a very attractive midstream investment opportunity,” said Mark Saxe, Managing Director in BlackRock’s Global Energy & Power Infrastructure group. “As a leading global energy infrastructure investor, our deep industry experience and technical expertise will enable us to bring strategic and operational insights essential to take the assets on to the next phase of their life cycle.”
Deutsche Bank Securities Inc. is serving as exclusive financial advisor to NGL. McGrath North is serving as NGL’s legal counsel.
Morgan Stanley is serving as exclusive financial advisor to GEPIF. Simpson Thacher & Bartlett is serving as GEPIF’s legal counsel.
About NGL Energy Partners LP
NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with five primary businesses: water solutions, crude oil logistics, NGL logistics, refined products/renewables and retail propane.
Based in Tulsa, Okla., SemGroup® Corporation (NYSE:SEMG) is a publicly traded midstream service company providing the energy industry the means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products, residual fuel oil and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy.