Williams Cos. Inc. and Global Infrastructure Partners are collaborating to potentially buy Noble Midstream Partners LP and take the master limited partnership private, Bloomberg reported Aug. 5.
While no agreement has been reached yet, according to Bloomberg's unnamed sources, Noble Energy Inc.'s upstream arm remains under a strategic review by its sponsor amid struggling stock prices and pressure from investors to eliminate Noble Midstream's required payments to the general partner, known as incentive distribution rights. Terry Gerhart, CEO of Noble Midstream's general partner, said during an Aug. 2 earnings conference call that the review is "an ongoing process" driven by the MLP's undervalued equity.
Both pipeline sector heavyweight Williams and private equity firm Global Infrastructure Partners have experience in midstream M&A transactions that involve a combination of public and private capital. Global Infrastructure Partners in 2018 bought Devon Energy Corp.'s stake in EnLink Midstream LLC and its MLP for $3.13 billion, while Williams recently teamed up with the Canadian Pension Plan Investment Board to form a joint venture in the Marcellus and Utica shales.
Private equity dominated blockbuster M&A in the pipeline industry during the first half of 2019, demonstrating a commitment to coughing up above-market-value prices for midstream operators and their assets.
Reuters reported in April that Noble was putting its MLP up for sale. Noble Midstream provides crude oil, natural gas and water-related midstream services in the DJ Basin in Colorado and the Delaware Basin in Texas.