Warren Equity Partners, a middle market private equity firm, has partnered with Multifuels LP to build a midstream pipeline platform. As part of the transaction, Multifuels is contributing an existing natural gas pipeline that supplies a utility service area in Texas, and Warren Equity is contributing $20 million of cash and equity commitments.
Multifuels Midstream Group will own, operate, and develop midstream projects in North America, with an emphasis on lateral distribution pipelines. These laterals will transport natural gas from main lines to end users, such as utilities and petrochemical plants, under long-term contracts that are not exposed to fluctuations in the price of oil and gas.
Multifuels Midstream Group is headquartered in Houston, Texas, and will be led by a management team that is experienced in the development of pipelines, gathering systems, and storage assets in the oil and gas industry. Randy Gibbs will be the CEO of the company, and Dick Robinson, Gil Muhl, and Jim Ducote will form the remainder of the management team.
The new company will execute on an existing portfolio of development projects that capitalizes on the US trend toward increased utilization of natural gas in power plants, petrochemical plants and industrial complexes; growth in the number of residential households accessing natural gas through local distribution companies; and increased export opportunities through LNG facilities. The company’s projects are being developed under long-term contracts with creditworthy counterparts.