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DTE to strike a deal for M5: Reuters
Posted on Friday, 18 October 2019 11:27
DTE Energy is looking to pick up assets from Momentum Midstream once again, this time working on a deal to acquire M5 Midstream for USD 2.50 billion, sources told Reuters.

The people, who declined to be named as the matter is not yet public, said the two could announce an agreement for the operator of a Haynesville shale formation pipeline spanning Louisiana and parts of East Texas as early as today.

However, they added the usual caveat there is no guarantee a sale will go ahead as discussions may yet fall apart and neither company responded to a request for comment when contacted by Reuters.

According to Momentum’s website, M5 has lean and rich gas gathering systems and fresh and produced water networks.

In 2016, DTE Energy acquired all of Appalachia Gathering System, the operator of 110-mile pipeline located in Pennsylvania and West Virginia, from Momentum’s M3 Midstream.

At the same time, the group also bought 55.0 per cent of Stonewall Gas Gathering (SGG) - comprising 40.0 per cent from the same subsidiary of the independent midstream company and 15.0 per cent from Vega Energy Partners.

The total consideration was USD 1.20 billion in cash and the assumption of USD 204.00 million of SGG debt.

Zephyr, the M&A database published by Bureau van Dijk, shows this acquisition was the tenth-largest deal targeting a pipeline operator announced in 2016.

In addition, Zephyr shows the latest purchase, if it goes ahead at the rumoured price, would be sixth-biggest of a gathering system in 2019 to date.

Utility activities make up 70.0 per cent to 75.0 per cent of DTE’s business, with gas storage and pipelines, power and industrial projects and energy trading accounting for 25.0 per cent to 30.0 per cent.

The group is focused on growing its non-utilities platform; for example, earlier this year its 50:50 joint venture Nexus Gas agreed to acquire Generation Pipeline, which supplies natural gas to power and industrial customers in Ohio.

Furthermore, in May, DTE bought an additional 30.0 per cent of SGG to bring its overall ownership to 85.0 per cent.

© Zephus Ltd