I Squared Nears Deal for $5 Billion Matterhorn Pipeline

(Bloomberg) -- A consortium led by I Squared Capital is considering buying Matterhorn Express Pipeline in a deal that would value the Texas natural gas conduit at about $5 billion including debt, according to people familiar with the matter. 

I Squared and co-investors including Enbridge Inc. have been in talks to buy a majority stake in Matterhorn, said the people, who asked to not be identified because the information is private.

First Infrastructure Capital Advisors, MPLX LP and Enlink Midstream LLC would remain investors in Matterhorn, while Devon Energy Corp. and Ridgemont Partners Management would exit, the people said. FIC and Ridgemont are private equity backers of Matterhorn investor WhiteWater Development LLC.

A final agreement hasn’t been reached and the timing could change or talks could still fall apart, the people added. 

Representatives for I Squared, Enlink and WhiteWater declined to comment, while Enbridge didn’t have an immediate comment. Spokespeople for FIC, MPLX, Devon and Ridgemont didn’t respond to requests for comment.

Matterhorn was set up by a group of pipeline developers to carry natural gas from the Permian Basin of West Texas and New Mexico — the country’s largest and most productive oil field — to a distribution hub outside of Houston. The 580-mile pipeline began operating late last year and is designed to transport up to 2.5 billion cubic feet per day of natural gas, according to its website. 

Permian Basin gas production has exploded in the past 10 years, though, and continues to require greater takeaway capacity.

With $45 billion in assets under management, Miami-based I Squared has invested in a broad range of infrastructure, including a North American school bus operator and Irish power producer, according to its website. In 2023, I Squared acquired a majority stake in the Whistler Pipeline in the Permian from First Infrastructure Capital, Ridgemont and affiliates of West Texas Gas Inc. and Stonepeak Partners, as well as from the WhiteWater management team, according to a statement at the time.

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