Pine Run Gathering acquires Pine Run Midstream for $205m

Pine Run Gathering has acquired Pine Run Midstream from an affiliate of oil and gas company PennEnergy Resources and minority partners for $205m.

Pine Run Midstream operates 43-miles of dry gas gathering pipeline and compression assets located in Butler and Armstrong counties in western Pennsylvania.

Operational since 2014, the Pine Run Midstream system will be operated by Stonehenge.

Pine Run Gathering is a joint venture owned by a subsidiary of Stonehenge Energy Resources III, a portfolio company of Energy Spectrum Partners VIII, and by a subsidiary of UGI Energy Services (UGIES), which is a subsidiary of UGI Corporation.

Stonehenge CEO Patrick Redalen said: “Stonehenge is pleased to add the Pine Run Midstream system to our operations in western Pennsylvania and views the strategic partnership with UGIES as a beneficial step to providing area producers with cost-effective, customer-focused services.

“The Pine Run Midstream system is a high-quality asset that has been well managed and operated by the PennEnergy team.”

For UGIES, the deal represents the second recent investment in Appalachian basin natural gas gathering systems.

UGIES, which plans to invest in assets that are well-positioned in productive areas of the Marcellus Shale, intends to add its ownership stake in Pine Run Gathering to UGI Appalachia.

UGI Appalachia operates gathering assets in Pennsylvania, Ohio and West Virginia.

UGI Natural Gas executive vice-president Robert F Beard said that the investment complements its existing portfolio of midstream assets.

Beard added: “Adding our stake in Pine Run Gathering to UGI Appalachia enhances and expands our footprint in western Pennsylvania and is consistent with the strategy outlined when we announced our acquisition of Columbia Midstream Group in 2019.

“Pine Run Midstream has direct connectivity to UGI’s Big Pine Pipeline, which is one of the assets acquired as part of the Columbia Midstream deal, and is well positioned to capture additional production nearby. Importantly, expansion of our natural gas portfolio enables us to provide low-cost, environmentally responsible energy to more consumers.”

UGIES president Joseph L Hartz said: “This asset will accelerate the growth of our existing western Pennsylvania natural gas gathering business and is a great strategic fit for UGIES.”