DTE Midstream is set to acquire a gathering system and gathering pipeline in the resurging Haynesville shale formation of Louisiana for $2.25 billion.
DTE will acquire 100% of the midstream assets from Momentum Midstream and Louisiana's largest gas producer Indigo Natural Resources. Assets that are part of the acquisition include an existing gathering system with 1.2 Bcf/d capacity and a 150-mile, 36" gathering pipeline under construction, which will be in service in the second half of 2020.
The company says that the acquisition has several key strategic and financial benefits. The assets in Louisiana's highly-economic Haynesville shale basin will enhance DTE Midstream's business and provide access to growing Gulf Coast markets. The assets serve multiple markets, including Louisiana, and the growing Gulf Coast where demand for natural gas is rapidly increasing in the power, industrial, pet chem and LNG export sectors. Haynesville provides the next opportunity for DTE to create significant value with its midstream assets in a high-quality basin.
Jerry Norcia, president and CEO of DTE Energy, says: 'DTE's non-utility operations continue to grow, perform well and fit nicely into our planned utility and non-utility mix. This acquisition significantly enhances the strength and diversity of DTE Midstream, adding premium assets in one of the fastest growing and best positioned US shale formations.
'This acquisition is highly accretive, has world-class resources, has excellent access to large markets, and is in the early to mid-cycle development phase. It checks all of our boxes.'
The transaction is expected to close in the fourth quarter of 2019.