Navigator Energy Services, a full-service midstream solutions provider based in Dallas, on Jan. 3 provided a company update including additional information surrounding its purchase of Glass Mountain Pipeline LLC, changes to the leadership team, and its renewed partnership with a fund managed by BlackRock Real Assets.
As previously announced by SemGroup Corp. (NYSE: SEMG) and NGL Energy Partners LP (NYSE: NGL), Navigator, in partnership with BlackRock Real Assets, closed on its purchase of 100% of GMP for a total consideration of $600 million. GMP is an approximately 215-mile, multi-play crude oil transportation system located in the Stack/Merge, Granite Wash and Mississippi Lime plays, delivering crude oil to a 1 million-barrel GMP-owned storage facility at Cushing, Okla.
Navigator is currently expanding the GMP system, constructing approximately 44 miles of additional pipeline further into the Stack play, and an additional 250,000 barrels of storage capacity. The expansion is expected to be operational in February. Once complete, the GMP system will include pipeline capacity of approximately 210,000 barrels of oil per day, and approximately 1.8 million barrels of storage.
In support of the significant volume growth within the Stack/Merge and Woodford resources plays, Navigator plans to further expand the footprint and overall capacity of the GMP system. Working with producer partners, substantial new gathering infrastructure is also anticipated. The considerable scale of the existing GMP system and its ability to segregate multiple grades of crude allows Navigator to offer customers a fulsome, differentiated suite of services to transport and store crude oil.
Navigator is led by a majority of the same leadership team that successfully guided the company to a full asset sale to NuStar Energy LP (NYSE: NS) in 2017. The seasoned management team is led by CEO Matt Vining, a Hart Energy Forty Under 40 honoree; and includes two additions: Nick Kubala as vice president of engineering, and Vidal Rosa as vice president of operations.
Kubala brings 10 years of engineering experience in a variety of different roles to the Navigator team. Prior to Navigator, he was manager of engineering and construction at Align Midstream LLC, where he was responsible for the engineering, development, and construction of Align’s pipeline and processing assets.
Rosa brings more than 20 years of industry experience to the Navigator team including various roles in operations and business development. He was formerly the director of operations for Centurion Pipeline LP, where he was responsible for the management of the entire Centurion pipeline system and terminals.
A fund managed by BlackRock Real Assets has provided an equity commitment to Navigator that will support the acquisition of GMP, as well as future expansions and growth opportunities. This is the fund’s second partnership with the Navigator management team. The two organizations previously partnered on the construction of Navigator’s Big Spring Gateway project (BSG) which was sold to NuStar for $1.5 billion in May 2017.
The BSG system consisted of more than 500 miles of crude oil gathering and transportation pipelines with deliverability of approximately 550,000 barrels per day; a pipeline gathering system with more than 200 connected producer tank batteries capable of more than 400,000 barrels per day of pumping capacity; and approximately 1 million barrels of crude oil storage capacity.
Navigator and BlackRock Real Assets Perspectives
“Navigator is proud to partner with BlackRock Real Assets, a global leader in energy investments,” said Vining. “As evidenced by the recent Glass Mountain deal, we are confident that BlackRock’s financial strength paired with our execution capacity and customer-focused approach to crude oil midstream services, will expand our existing competitive advantage in the marketplace and position us to source good investment opportunities across all points in the commodity cycle.
“From an operations perspective, we are excited about the Glass Mountain asset and look forward to aggressively building out its footprint under the same customer-focused foundation on which we have built Navigator’s reputation,” continued Vining.
“This is our second partnership with the Navigator management team,” said Mark Saxe, managing director in BlackRock’s Global Energy & Power Infrastructure group with BlackRock Real Assets. “They have an outstanding reputation in the producer community as being a responsive, dynamic and creative group that works tirelessly to provide reliable and flexible midstream solutions. We look forward to our partnership in relation to the Glass Mountain system, and are pleased to be able to offer our clients a very attractive midstream investment opportunity.”