Enstor Gas LLC has signed an agreement to buy the Black Bear natural gas pipeline system from Basalt Infrastructure Partners LLP.

The assets, under Black Bear Transmission Opco LLC, deliver gas from multiple points to power generation, industrial and utility users across the Southeastern United States, according to a joint statement. The assets consist of nine regulated transmission systems stretching around 1,700 miles and with a throughput capacity of about 2.6 billion cubic feet a day (Bcfd). The pipelines interconnect with 16 long-haul pipelines and storage facilities across seven states: Alabama, Arkansas, Louisiana, Mississippi, Missouri, Oklahoma and Tennessee. 

Black Bear is “a highly complementary addition to Enstor’s platform that enhances operational efficiencies and supports our long-term growth strategy”, said Enstor chief executive Paul Bieniawski said. “The Black Bear system is contracted with investment-grade counterparties, which complements Enstor’s existing contract portfolio, and represents a strategic downstream expansion, providing a portfolio of demand-driven, regulated ‘last-mile’ pipelines serving utilities, power generators and other key end-use customers across the Southeast U.S.”

Upon the completion of the transaction Enstor will have over 1,800 miles of pipelines, in addition to its six existing underground gas storage facilities with over 110 Bcf of certificated working gas capacity, the statement said.

The parties expect to close the transaction in the fourth quarter subject to customary conditions including regulatory approvals, the statement said. It did not disclose the price. The transaction is between Enstor Pipeline Holdings LLC and certain funds advised by Basalt.

TD Securities is exclusive financial advisor and Kirkland & Ellis LLP is legal counsel to Enstor. Citigroup is exclusive financial advisor while Morgan, Lewis & Bockius LLP is legal advisor to Basalt.

Last month Enstor said its parent company Emerald Storage Holdings LLC had received from the Federal Energy Regulatory Commission a Notice to Proceed with Construction for the Mississippi Hub Expansion Project.

Mississippi Hub is an underground gas storage facility on the Bond Salt Dome in Simpson County, Mississippi. The expansion will build three additional storage caverns each with about 10 Bcf of working storage capacity. The project also involves the incremental expansion of the hub’s existing caverns. In total the project will add up to 33.5 Bcf of new working gas capacity and up to 0.7 million dekatherms per day of new injection capacity.

When the expansion is completed, Mississippi will have 56.3 Bcf of working storage capacity and 1.9 million dekatherms per day of injection capacity, in addition to the existing withdrawal capacity of 2.4 million dekatherms per day.

Enstor expects the expansion project to start operation by 2028.

To contact the author, email jov.onsat@rigzone.com


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