Converge Midstream, a crude oil storage and transportation company affiliated with Riverstone Credit Partners, recently completed the acquisition of the assets of Fairway Energy Partners.
Fairway filed a voluntary petition for relief under Chapter 11 on Nov 26, 2018, and launched a bankruptcy-court supervised 363 sales process. On April 10, Riverstone emerged as the successful bidder for the Fairway assets in an auction that included bids from ExxonMobil Pipeline Company, Enterprise Products Operating, Magellan Crude Oil Pipeline Company and Sullivan Brothers Investments.
“Our credit platform, Riverstone Credit, first became involved with Fairway as a lender,” said Pierre F Lapeyre, co-founder of Riverstone. “As an institution, we were drawn to the asset footprint and its strategic position in providing access to the Houston market and surrounding export hubs. As an owner of many upstream and midstream businesses in the major North American basins, we have experienced first-hand the push of barrels that need to make their way to Houston and onwards to the export market.
“We are excited to now own and operate these assets under the leadership of Dana Grams and his team, bringing both capital and the complementary businesses of the Riverstone platform to help grow the Converge business.”
The acquisition repositions assets for future growth, Converge said. The company now is uniquely suited to act as a major hub to shippers and other operators looking to move multiple grades of crude oil in and out of Houston. It will be led by CEO Dana Grams, Chief Financial Officer Robert Flavin and Chief Operating Officer James Scandola.
Converge assets include:
- 6.5 million barrels of crude oil storage capacity (with the ability to grow to 19 million barrels) on the Pierce Junction Salt Dome located at the city-gate entrance to the Houston Ship Channel
- Dual 24-inch, bi-directional pipelines running between Genoa and Speed Junctions with potential connectivity to the Houston Ship Channel and other major export terminals
- Right-of-way agreements and other assets forming the footprint of an integrated crude oil terminal poised to service the Houston area export markets
“We are excited to bring the company’s assets to their highest and best use with the financial backing of Riverstone Holdings,” Gram said. “Riverstone Holding’s reputation and financial strength provides Converge an advantage to further develop the geographical reach of our pipeline system, allowing us to access new supply sources and exports facilities in the Houston Ship Channel market area. We have already begun to solicit the network of relationships within the Converge and Riverstone families.
“We intend to position Converge as an integral trading and storage hub, facilitating large scale movements of crude oil to address the increasing demand for exports from the Houston Ship Channel and beyond.”