A handful of investors including General Electric Co. (GE) and Quanta Services Inc. (PWR) will invest in natural gas pipeline operator Howard Energy Partners, owner and operator of 280 miles of natural gas pipelines in the Eagle Ford Shale of South Texas.
Under the deal, GE, Quanta and Crosstex Energy LP (XTEX) will each own a 30.6% stake in the pipeline operator. Clear Springs Energy Co. LLC is also making an investment.
As part of their investment, Crosstex and Quanta will each contribute $87.25 million. GE did not disclose what it would pay for its stake.
Howard Energy said it will use the funds to acquire the natural-gas-gathering assets of Meritage Midstream Services LLC in South Texas. Following the deal's closing, Howard Energy will own and operate roughly 450 miles of natural-gas-gathering pipelines in the state.
"This fits perfectly with our strategy of working with expert management teams to meet rapidly growing producer demand for infrastructure," said John Shepherd, a managing director at GE Energy Financial Services.
Recent years have seen a massive drilling boom across North America as companies race to participate in shale resource plays like the Eagle Ford Shale.
Shares of General Electric were recently up 0.5% to $19.88 in premarket trade. Shares of Quanta and Crosstex Energy were unchanged from Wednesday closes at $21.65 and $16.97, respectively.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com
