Midstream Update

The midstream sector of the oil & gas industry has seen relatively robust JV, M&A, and capital raising activity through 2023 and into 2024, fueled by commodity price stability, major players looking to gain economies of scale, strategic pipeline opportunities, and private equity funds seeking returns. Though down or flat from a deal volume perspective, M&A transaction values of significance abound in the past few quarters, including transactions involving MPLX, Enbridge, Energy Transfer, Enterprise Products Partners, EQT Corp., Diamondback Energy, and others.

The industry will continue to be shaped by significant dynamic drivers over the short and long-term, including the pace and breadth of technological advancements, regulatory and environmental policies, market competition, and supply chain constraints. Sidley works closely with clients to stay on top of and ahead on these risks and challenges as our clients continue to evolve and grow.

How We Add Value

We provide commercial-minded advice to midstream clients in a broad range of capital markets, master limited partnerships, mergers and acquisitions, joint ventures, commercial, project development, project finance, and syndicated financing transactions.

We represent midstream companies, shippers, and financing providers – from every part of the debt and equity capital stack – in every major basin in the U.S. and in numerous international jurisdictions, both onshore and offshore, on an array of projects and other transactions involving interstate oil, natural gas and liquids pipelines, processing assets, storage terminals, refineries, petrochemical facilities, and LNG facilities (import and export terminals, liquefaction and regasification facilities).

We regularly advise on:

• acquisitions and divestitures of midstream and infrastructure assets, including gathering and processing facilities, storage facilities, pipelines, and terminals;
• entity-level M&A activity in the midstream and infrastructure space;
• joint ventures for asset acquisition, development, and more;
• private equity investments into management teams;
• various commercial and industry agreements, including gathering, processing, transportation and/or storage agreements, volume commitments, acreage dedications, transportation agreements, interconnects, and more;
• construction and installation agreements;
• project financings for gas processing plants, GTL plants, and other midstream assets; and
• bidding and contract negotiations for multiple new-build pipelines.

Related Matters

Some of our recent experience in the space includes representing:

• Stonepeak in the sale of its portfolio company, WTG Midstream Holdings LLC to Energy Transfer LP (NYSE: ET) for US$3.25 billion.
• NuStar Energy L.P. (NYSE: NS) in its sale to Sunoco LP (NYSE: SUN) in an all-equity transaction valued at approximately US$7.3 billion, including assumed debt.
• Energy Transfer LP (NYSE: ET) in its purchase of Lotus Midstream Operations, LLC from an affiliate of EnCap Flatrock Midstream for US$1.45 billion.
• Morgan Stanley Energy Partners and its portfolio company, Durango Midstream LLC, in connection with the sale of Durango Midstream’s subsidiary, Durango Permian LLC, to Kinetik (NYSE: KNTK) for US$765 million.
• Enterprise Products Partners L.P. (NYSE: EPD) in connection with a public offering by its operating subsidiary, Enterprise Products Operating LLC, of US$2.0 billion aggregate principal amount of senior notes.
• JERA Americas Inc. in the sale of a 15% membership interest in Gulf Coast LNG Holdings LLC to JAPEX (U.S.) Corp.
• Pearl Energy Investments in its initial capital commitment to Voyager Midstream Holdings.
• Stonepeak in its acquisition of a 50% interest in KAPS, a Canadian natural gas liquids (NGL) pipeline system.
• USA Compression Partners, LP (NYSE: USAC) and USA Compression Finance Corp. in connection with a Rule 144A offering of US$1 billion aggregate principal amount of senior notes.
• Enbridge, Inc. (NYSE: ENB) in its transaction with EnCap Flatrock Midstream to acquire Moda Midstream Operating, LLC for US$3 billion.

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