Only two months after acquiring Oryx Midstream Services LLC—the largest privately-held midstream crude operator in the Permian Basin, Stonepeak Infrastructure Partners has shaved off a stake in the company in a deal with Qatar.

Oryx Midstream said Aug. 7 that an affiliate of Qatar Investment Authority (QIA) has acquired “a significant stake” in Oryx and has committed to invest up to $550 million in the development of the company.

The investment follows Oryx’s sale to Stonepeak, an infrastructure-focused private equity firm, for roughly $3.6 billion in cash. The transaction, which included upstream producers Concho Resources Inc. and WPX Energy Inc. cashing in their stakes, closed in May.

RELATED:

“Anatomy Of A Deal: Betting On Oryx Midstream” featured in the June 2019 issue of Oil and Gas Investor

For Qatar, the Oryx deal builds on an investment push by the country in the U.S., according to Mansoor al-Mahmoud, CEO of QIA.

“This acquisition is a further demonstration of QIA’s strategy to increase the size of our U.S. portfolio, and to invest more in major infrastructure projects,” Mahmoud said.

In late 2018, the CEO of Qatar Petroleum, Saad al-Kaabi, told Reuters that Qatar was looking to invest at least $20 billion in the U.S. over the coming few years. As part of the investment push, Kaabi said Qatar—known for its influence in the LNG market—was looking at “gas and oil, conventional and non-conventional,” according to the Reuters report.

The partnership with Oryx is the latest in a series of investments undertaken by QIA across the U.S. where QIA aims to increase investment to $45 billion in the coming years, according to the Oryx press release.

Mahmoud added that he believes Oryx represents “a strong midstream platform with tremendous growth potential,” and his company looks forward to working with their new partners at Stonepeak.

Since its founding in 2013, Oryx has established itself as one of the leading midstream operators in the Permian Basin and Oryx CEO Brett Wiggs expects the QIA investment to help the company grow even more.

The Oryx system transports crude oil from the Permian Basin to market hubs for ultimate delivery to the Gulf Coast. Upon completion of the remaining part of the system under construction, Oryx’s  total transportation capacity will exceed 900,000 barrels per day and access multiple takeaway options.

“The significant investment and commitment from QIA alongside Stonepeak’s strong operational and capital support will allow us to continue to grow our footprint in the Permian Basin and deliver the highest level of service to current and future customers,” Wiggs said in a statement.

Stonepeak has over $15 billion of assets under management and with offices in Houston, New York and Austin, Texas. The firm invests in “long-lived, hard-asset businesses and projects that provide essential services to customers,” the Oryx release said.

Co-founder and CEO of Stonepeak, Michael Dorrell, commented that his firm believes Oryx is a uniquely positioned strategic platform and a core North American infrastructure asset.

“Stonepeak and Oryx remain focused on providing critical midstream services to accommodate growing Permian production, and QIA’s commitment to Oryx meaningfully furthers this goal,” Dorrell said in a statement.

White & Case LLP served as legal adviser to QIA for the transaction. Meanwhile, Sidley Austin LLP was Stonepeak’s legal adviser.

Emily Patsy can be reached at epatsy@hartenergy.com.

Comments