Detroit’s DTE Midstream is acquiring a gathering system and gathering pipeline in the Haynesville shale formation of Louisiana for $2.25 billion in cash.
Under the terms of the agreement, DTE will acquire 100% of the assets from Momentum Midstream and Indigo Natural Resources, the primary gas producer supplying the system. Assets that are part of the acquisition include an existing gathering system and a 150-mile gathering pipeline under construction, which will be in service in the second half of 2020. Once that project is complete, DTE Midstream will pay an additional $400 million.
The primary assets gather natural gas produced in the Haynesville shale basin and access multiple major downstream pipelines, including those serving the Gulf Coast.
In a statement issued last week, DTE Energy President and CEO Jerry Norcia said assets in “Louisiana’s highly-economic Haynesville shale basin” will provide the company with access to growing Gulf Coast markets. The assets serve multiple markets, including Louisiana, the nation’s third largest natural gas consumer, and the growing Gulf Coast where demand for natural gas is rapidly increasing in the power, industrial and LNG export sectors.
The transaction is expected to close in the fourth quarter of 2019.
