Morgan Stanley’s infrastructure arm has begun reaching out to potential buyers of gas pipeline operator Southern Star Central Corp., people familiar with the matter said.
Morgan Stanley Infrastructure Partners, working with investment bank Tudor Pickering Holt & Co. on the sale, sent offering documents to potential bidders including Tallgrass Energy Partners LP (NYSE: TEP) and TransCanada Corp. (NYSE: TRP), said the people, asking not to be identified discussing private information.
The business is valued at as much as $1.5 billion, the people said. Morgan Stanley Infrastructure is also soliciting bids from operators of gas pipelines including The Williams Cos. Inc. (NYSE: WMB) and Spectra Energy Corp. (NYSE: SE) and Boardwalk Pipeline Partners LP (NYSE: BWP), as well as other infrastructure investors including Caisse de Depot et Placement du Quebec and Macquarie Group Ltd., the people said.
Representatives for Morgan Stanley, Caisse de Depot and Boardwalk declined to comment. Representatives for Tudor Pickering, TransCanada, Tallgrass, Spectra and Williams didn’t immediately return calls for comment.
Takeovers of companies that help move and process oil and gas surged last year, as Targa Resources Corp. (NYSE: TRGP), Williams and other pipeline operators sought to bulk up. Morgan Stanley is approaching potential buyers while other sellers—including Whiting Petroleum Corp. (NYSE: WLL) and Oasis Petroleum—are also seeking to offload oil and gas transport and storage infrastructure.
Southern Star, based in Owensboro, Ky., operates 6,000 miles of natural gas pipelines in Kansas, Missouri and elsewhere in the Midwestern U.S., according to its website. Morgan Stanley’s infrastructure fund acquired 40% of Southern Star in 2010 and the rest of the company in 2012, according to company statements.
Recommended Reading
US Drew New No. 3 Record 326 Bcf From Storage in Winter Storm Heather
2024-01-25 - The draw wiped out nearly all the year-over-year excess natural gas in storage, according to U.S. Energy Information Administration data.
Trans Mountain Pipeline Announces Delay for Technical Issues
2024-01-29 - The Canadian company says it is still working for a last listed in-service date by the end of 2Q 2024.
Oil Prices Edge Lower on False Report of Israeli Ceasefire, Sustained OPEC Cuts
2024-02-01 - Oil prices fell 2% on the false speculation that Israel and Hamas had tenatively agreed to a ceasefire, but losses were subsequently pared.
Midstream Builds in a Bearish Market
2024-03-11 - Midstream companies are sticking to long term plans for an expanded customer base, despite low gas prices, high storage levels and an uncertain political LNG future.
Arctic Vortex Pumps Up Natural Gas Demand, But It Won’t Last
2024-01-16 - Cold temperatures caused higher gas usage and dropped production, but the spike in demand is unlikely to have lasting effects.