LNG

Luxembourg private equity group CVC Capital Partners has struck a deal to take over the Netherlands-based infrastructure group DIF Capital Partners with its investments in LNG carrier newbuilds.

CVC, a leading global markets asset management firm focused on private equity, is acquiring a majority stake in leading infrastructure manager, DIF Capital Partners and providing a commitment to acquire the remaining shares over time.

This combination creates a global private markets manager based in the European Union with around €177 billion ($190.2Bln) of total assets under management.

DIF is headquartered in Amsterdam with €16Bln of assets under management, a team of over 225 professionals across 11 offices and operating two different investment strategies.

Founded

The Dutch firm was founded in 2005 and has built a leading position in mid-market infrastructure investments, primarily in Europe, North America and Australia.

DIF has a 31 percent stake in five LNG carrier with capacities of 174,000 cubic metres.

The vessels are on long-term contracts and fly the French flag.

A statement said that the tie-up with CVC would help accelerate growth as DIF continues to deepen and widen its investment capabilities and geographic reach.

DIF will continue to be led by its current Chief Executive and Partners and it would operate under the DIF brand.

“Expanding into infrastructure is a logical next step for us, given the long-term secular growth trends in infrastructure and its adjacency to our existing strategies,” said CVC Chairman and Co-Founder Rolly van Rappard.

Growth

“We have known the DIF team for several years, and we are delighted to partner with one of the top pure-play global infrastructure managers, with an impressive track record of performance and growth,” Van Rappard added.

Wim Blaasse, CEO and Managing Partner at DIF said he was pleased with the CVC tie-up.

“This transaction enables us to benefit from CVC’s global platform, scale and investor relationships, and to double down on important infrastructure sectors like Energy Transition and Digitalisation while retaining independence over our investment decisions,” stated Blaasse

The transaction is subject to regulatory and other consents and is expected to close in the fourth quarter of 2023 or the first quarter of 2024.

The Dutch works council of DIF has been informed and positively advised on the transaction.

Advisers to CVC in this transaction included JPMorgan. DIF’s advisers included, among others, Morgan Stanley & Co. Plc, Loyens & Loeff, PwC and De Brauw.

Tokyo Gas, the second-largest Japanese LNG importer, has agreed to sell stakes held in four out of five LNG export projects in Australia, to the US-based private equity firm EIG Global Energy Partners.

Brookfield Infrastructure Partners of Canada has raised its hostile takeover bid for Inter Pipeline Ltd to about C$8.58 billion (US$6.86Bln) to counter for a second time a bid from Pembina Pipeline Corp., the joint venture partner of the Cedar LNG project in British Columbia.

Pembina had made an all-stock bid of about C$8.50 billion, or C$19.7 per share, while Brookfield has trumped that offer with an all-cash option.

Brookfield is based in Toronto in the province of Ontario while Inter Pipeline and Pembina have their headquarters in Calgary, capital of the oil and gas province of Alberta.

Brookfield said Inter Pipeline shareholders could now choose to receive either C$20.00 per share in cash or 0.25 of a share of Brookfield Infrastructure Corp, which translates into C$23.85 for each Inter share.

“The increased offer provides superior value to Inter Pipeline shareholders, representing a premium of C$1.53 or 8 percent versus the proposed transaction with Pembina Pipeline,” stated Brookfield.

It had previously offered about C$19.50 in all-cash per Inter share, or 0.225 of Brookfield’s Class A share.

Inter Pipeline had already recommended that shareholders vote for the offer from Pembina.

The sweetened offer from Brookfield came a day after the Alberta Securities Commission ruled that Inter did not engage in any improper defensive tactics to fend off Brookfield’s first hostile takeover bid.

Bidding war

The bidding war is for Inter Pipelines oil and gas pipeline assets, located mainly in Western Canada, as well as its storage facilities and processing plants.

Pembina, the joint developer of the Cedar floating LNG joint venture in BC with the Haisla First Nation, also owns the rejected Jordan Cove LNG export project in the northwest US state of Oregon.

Pembina’s Jordan Cove project was the first hydrocarbon venture stopped by the federal regulators under the Biden Administration, even before the Keystone XL pipeline cancellation by presidential decree.

The Jordan Cove liquefaction plant was proposed for a 200-acre site at Coos Bay in Oregon, comprising five small-scale Trains, each with 1.5 million tonnes per annum of output, for a total of 7.5 MTPA.

The Jordan Cove project also included the separate 230-mile Pacific Connector Pipeline traversing four counties in southern Oregon on the route to the liquefaction plant and feed gas would have been sourced from the Rockies.

Since the Jordan Cove cancellation in January 2021, Pembina has teamed up in a 50-50 partnership with the Haisla Nation for the proposed Cedar project in the Douglas Channel near the BC town of Kitimat.

Cedar LNG is expected have a liquefaction capacity of around 3 MTPA of LNG and will source natural gas from the prolific Montney resource play in northeast BC.

'Strategic Combination'

Under the “Strategic Combination”, Inter Pipeline shareholders would have receive 0.5 of a common share of Pembina for each common share of Inter Pipeline.

This represented an immediate value of $20.06 per share based on the closing price of Pembina's common shares.

Pembina and Inter Pipeline shareholders would have owned 72 percent and 28 percent respectively of the combined Pembina-Inter company.

Pembina had said that among the significant benefits for Inter Pipeline was being included in the partnerships with First Nations to develop Cedar LNG and to pursue ownership of Trans Mountain Pipeline and Expansion.

Pembina was chosen by the Western Indigenous Pipeline Group to be the industry partner in the formation of the Chinook Pathways Partnership.

Chinook Pathways is an Indigenous-led partnership working to organize a significant number of First Nation communities to pursue ownership of the Trans-Mountain Pipeline following completion of the construction of the Trans-Mountain Expansion.

Royal Dutch Shell's annual LNG sales jumped 16 percent to more than 66 million tonnes as Australian production increased along with global prices, boosting annual earnings along with cash generated from assets sales to almost $16 billion.