Converge Midstream has completed the acquisition of the assets of Fairway Energy Partners, including 6.5 million barrels of crude oil storage capacity.
On 26 November, 2018, Fairway filed for bankruptcy. On 10 April, 2019, Riverstone Credi, of which Converge Midstream is affiliated with, emerged as the successful bidder for the Fairway assets, in an auction that saw bids from ExxonMobil Pipeline Company, Enterprise Products Operating, Magellan Crude Oil Pipeline Company, and Sullivan Brothers Investments.
This acquisition has repositioned the assets for future growth. Converge is now 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. The company will be led by Dana Grams, CEO; Robert Flavin, CFO; and James Scandola, COO.
The Converge assets include:
- 6.5 million bbls of crude oil storage capacity (with the ability to grow to 19 million bbls) 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; and
- Right-of-way agreements and other assets forming the footprint of an integrated crude oil terminal poised to service the Houston area export markets.
Pierre F. Lapeyre, co-Founder of Riverstone Holdings, says: ‘Our credit platform, Riverstone Credit, first became involved with Fairway as a lender. 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.’
Dana Grams, CEO of Converge Midstream, adds: ‘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.’