Ares Management said it has acquired a stake in the Rover natural gas pipeline from a unit of fellow investment firm Blackstone for an undisclosed sum, as interest in U.S. energy infrastructure assets grows.
In a statement sent to Reuters, Ares said funds led by its Infrastructure Opportunities strategy would buy 32.4% of Rover, a pipeline system spanning around 700 miles (1,130 km) in Pennsylvania, West Virginia, Ohio and Michigan which moves natural gas from the Appalachian shale basin to Midwestern markets and beyond.
Natural gas is playing a key role in supporting increased power generation to meet soaring demand from data centers and industry’s wider electrification efforts, and the conflict in the Middle East has boosted the allure of assets in jurisdictions that can operate unencumbered by geopolitical tensions.
“Large-scale, strategically located assets like Rover, which offer much-needed egress for in-basin supply, are playing a central role in the natural gas value chain and represent a compelling opportunity for expansion,” said Anthony Omokha, managing director in Ares Infrastructure Opportunities.
No financial details were disclosed in the statement.
It is the second transaction involving a stake in the Rover pipeline announced in the last month. On March 31, Abu Dhabi-based investment firm ePointZero said it had agreed to buy Traverse Midstream for $2.25 billion from private equity firm The Energy & Minerals Group. Among the assets owned by Traverse is a 35% stake in Rover.
Blackstone, which first acquired its stake in Rover in 2017, had held its investment within its Energy Transition Partners unit, the statement said. Energy Transfer operates and owns the rest of Rover.
Rover is the second notable natural gas pipeline asset in Appalachia which Ares has bought in recent months, having acquired Meade Pipeline Co in September from XPLR Infrastructure.
Ares worked with law firm Kirkland & Ellis on the Rover transaction. Blackstone’s financial advisers were RBC Capital Markets and Mizuho affiliate Greenhill & Co, with Vinson & Elkins its legal adviser, the statement added.
(Reporting by David French in New York; Editing by Echo Wang and Lincoln Feast.)