latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/oil-gas-pipeline-m-a-bounces-back-as-sector-approaches-critical-mass-65279214 content esgSubNav
In This List

Oil, gas pipeline M&A bounces back as sector approaches critical mass


Insight Weekly: Earnings learnings; Duke Energy hits back; PE activity surges


Banking Essentials Newsletter: July Edition - Part 3


Q&A: Data That Delivers - Automating the Credit Risk Workflow


Gauging Supply Chain Risk In Volatile Times

Oil, gas pipeline M&A bounces back as sector approaches critical mass

Large-scale midstream dealmaking rebounded in the first half of 2021 amid soaring momentum for sector-wide consolidation, according to an analysis of S&P Global Market Intelligence data.

During that period, North American oil and gas pipeline companies announced nine M&A transactions with values exceeding $500 million each as the number of public pipeline firms continued to shrink toward an ideal critical mass.

The biggest deal announced so far this year was Pembina Pipeline Corp.'s C$15.38 billion share-for-share bid for fellow Canadian operator Inter Pipeline Ltd. Pembina, however, faces stiff competition from private equity powerhouse Brookfield Infrastructure Partners LP, which submitted an earlier, unsolicited offer to take Inter Pipeline private. Brookfield countered with a cash and share-based consideration valued at C$19.75 per Inter Pipeline share before adding an option for Inter Pipeline shareholders to receive up to 100% cash consideration. Pembina's proposal does not include a cash consideration.

SNL Image

Unitholders will vote on the Pembina-Inter Pipeline transaction July 29. Brookfield owns about 10% of outstanding Inter Pipeline shares, analysts at energy investment bank Tudor Pickering Holt & Co. noted June 1. This means "a two-thirds majority will be required from the remaining ~90% of shares outstanding if [Brookfield] votes against the deal," the analysts said.

Energy Transfer LP's $7.34 billion offer to acquire Enable Midstream Partners was the second-largest deal announced during the first half of 2021. According to an SEC filing, Energy Transfer beat out seven other interested parties and first spoke with Enable about a potential transaction in September 2020.

The biggest asset-level transaction announcement, meanwhile, was Kinder Morgan Inc.'s agreement to buy Stagecoach Gas Services LLC from Crestwood Equity Partners LP and Consolidated Edison Inc. for $1.23 billion. A $1 billion windfall from February's severe winter storm enabled the pipeline giant to deploy the capital, analysts said.

When it came to financial advising, Canada's RBC Capital Markets LLC participated in the most deals. In addition to being involved in the Energy Transfer-Enable transaction, the investment bank also advised parties to Enbridge Inc.'s sale of a 38.9% stake in Noverco Inc. to Trencap s.e.c. and ArcLight Capital Partners LLC's agreement to purchase a 25% interest in Natural Gas Pipeline Co. of America LLC from Kinder Morgan and Brookfield Infrastructure Partners.

Citigroup Global Markets Inc., JP Morgan Chase & Co. and Goldman Sachs Group Inc. each participated in two of the midstream transactions.