Renegade Waiting for ‘Catalyst’ as it Mulls Building, Buying Midstream

Roughly half a year after selling the assets of Pinnacle Midstream II for $550 million, the midstream executives behind the deal are paring down the potential opportunities for their latest venture, Renegade Infrastructure LLC.

Renegade recently secured an inaugural equity capital investment from private equity firm Energy Spectrum Partners, which was also a primary investor in Pinnacle Midstream II.

Drew Ward, Renegade’s founder and CEO, said the company is considering several greenfield projects and M&A. For now, Renegade is “basin agnostic” about where to develop. The company is seeking a niche where infrastructure development is needed by a larger company that also has immediate priorities elsewhere.

“We really are trying to be opportunistic acquirers of existing assets and go in and try to find the operational efficiencies in those assets, and grow them commercially,” Ward told Hart Energy. “There's a handful of those assets that exist within larger, consolidated companies that some would consider capital starved—not because of their location, but because those big companies have a better return profile somewhere else.”

The company’s path could potentially follow the same pattern as Pinnacle II. The CEO said he was open to any sector of the midstream business, but would prefer to stay on the natural gas side.

“We've done gas assets, we've done crude assets,” he said. “I think our first preference would be to stay in the gassy side of the business—that includes gathering, compression and processing. Not that we will not look at other assets, but I'm a firm believer in the gas business.”

Pinnacle II’s G&P Dos Picos System in the Midland Basin consisted of natural gas and NGL lines tied into a processing plant in southeastern Midland County. Phillips 66 announced it would purchase the system in May 2024 as part of the company’s overall goal of creating an integrated “wellhead to the market” NGL system.

Ward founded Renegade soon after the sale closed in July. The team includes Pinnacle veterans Jason Tanous as CFO and J. Greg Sargent, who will serve as the senior adviser to the company’s board of managers.

Renewing the relationship with Energy Spectrum was key for Renegade’s plans. Each party’s familiarity with the other aids rapid decision-making when the right prospect becomes available.

“We're waiting for some sort of catalyst, or volatility in the marketplace that allows us to insert ourselves into the system with venture capital or private equity, whatever you want to call it,” Ward said. “But you can't do that if you don't have the powder lined up and sitting on the sidelines with you.”