TPG Invests in Summit Midstream's Double E Gas Pipeline in Texas

Updated 1 year 8 months ago

TPG Energy Solutions has agreed to purchase up to $80 million of redeemable, preferred interests in a new Summit Midstream subsidiary which holds Summit's 70% interest in the Double E gas pipeline. In connection with the transaction, TPG will fund the next $80 million of capital calls associated with Double E. Upon receipt of Double E's FERC 7(c) certificate which is expected in 3Q 2020, Summit plans to raise a non-recourse commercial bank financing to fund a substantial majority of remaining capital obligations. Summit expects the preferred equity and bank financing to cover more than 70% of Summit's USD 350 million funding obligation associated with Double E.

The new subsidiary will pay a 7% quarterly distribution for preferred units. TPG will have the option to purchase an additional USD 60 million of preferred units, and the subsidiary has the right to redeem TPG's preferred interests in whole or in part for cash over the next seven years at a predetermined price. Summit will continue to lead the development, permitting, and construction of Double E and will operate the pipeline following commissioning. The Double E pipeline will have a capacity of 1.35 billion cubic feet per day from multiple receipt points in the Delaware Basin to delivery points near the Waha Hub in Texas. Double E has secured 10-year take-or-pay commitments for a substantial majority of initial throughput capacity and is expected to enter service in 3Q 2021.