Company plans aggressive development of midstream infrastructure in Utica
Blue Racer Midstream LLC has secured a five-year, $800 million credit facility, which can be expanded to $1 billion in the future. Formed in December 2012, Blue Racer is a $1.5 billion joint venture between Caiman Energy II LLC and Dominion Resources.
Together with the private equity commitment from Caiman and the midstream assets contributed by Dominion, the credit facility supports the execution of Blue Racer’s plan to develop midstream assets in the Utica Shale over the next two to three years, including natural gas gathering, processing, fractionation and NGL transportation.
Wells Fargo Securities LLC and RBS Securities Inc. acted as joint bookrunners and joint lead arrangers on the credit facility. A syndicate of 19 banks participated in the credit facility, with Comerica Bank, RBC Capital Markets, SunTrust Robinson Humphrey Inc., and US Bank National Association also acting as joint lead arrangers. The transaction closed on Friday, Aug. 16.
Jack Lafield, Blue Racer’s CEO said, “The proceeds will allow us to continue to execute our growth strategy for Blue Racer’s midstream asset base while diversifying our sources of capital.Our goal is to continue to be the Utica’s premier midstream company by providing superior customer service and the region’s best opportunity to gather and process rich gas and market NGLs.”
Blue Racer executive vice president and CFO Stephen L. Arata and his finance team oversaw the arrangement of the credit facility. Vinson & Elkins provided legal counsel to Blue Racer.
News of the credit facility follows last week’s announcement that Dominion transferred ownership of the Natrium Natural Gas Processing and Fractionation Plant to Blue Racer on Aug. 9, 2013. With cryogenic processing capacity of 200 million cubic feet per day (MMcf/d) already online, Natrium is the first large-scale processing plant to serve rich-gas production in the Utica Shale. Blue Racer has already started construction of a second 200 MMcf/d cryogenic processing plant, Natrium II, which will bring the facility’s total processing capacity to 400 MMcf/d by the end of the first quarter of 2014.