LONDON/Aberdeen, Scotland (Reuters) - Antin Infrastructure Partners has hired investment banks to kick-start a potential $1.5 billion-plus sale of one of Britain’s biggest gas pipelines, banking sources and an executive at a subsidiary of the buyout fund said.
The sale of Central Area Transmission System (CATS), a 250-mile pipeline that transports gas from a cluster of North Sea fields to Teesside in northern England, is expected over the next 12 months with the help of Bank of America-Merrill Lynch and Citi, Andy Hessel, managing director at Kellas Midstream, told Reuters.
Kellas Midstream is the Antin subsidiary that manages CATS, which banking sources said could fetch more than $1.5 billion.
Antin, a private equity fund that mostly specializes in European energy, transport and telecoms investments, bought CATS from gas producer BG, now part of Royal Dutch Shell, and BP between 2014 and 2015. It owns 99% of the business, with Italy’s Eni and U.S. ConocoPhillips sharing the remaining 1%.
An infrastructure project that was only second in size to the Channel Tunnel when it was built in the early 1990s, CATS transports about 10% of Britain’s annual gas production.
Private equity investors and pension funds have been attracted by midstream infrastructure assets because of the potential for steady cash flow through long-term contracts, helping to limit risk when crude prices tumble.
The North Sea offshore basin has undergone a broad change of guard in recent years as low oil prices prompted major oil and gas companies to sell assets to private equity-backed investors and specialist operators.
Producers including Neptune Energy, backed by Carlyle Group and CVC Capital Partners, have raised billions of dollars to snap up assets from which they believe more oil and gas can be squeezed
Antin’s energy portfolio also includes stakes in solar plants in Spain and an interest in northern French midstream oil company Pisto.
Editing by David Goodman