Energy Capital venture in pipeline deal

Summit Midstream Partners will invest $207m in Colorado- and Utah-based ETC Canyon Pipeline. Summit invested $590m for natural gas assets in the same basin last October.

Energy Capital Partners-backed Summit Midstream Partners will acquire ETC Canyon Pipeline for $207 million.

ETC Canyon gathers and processes natural gas in the Piceance and Uinta basins in Colorado and Utah. The transaction marks Summit Midstream’s first acquisition of 2012 and second purchase of assets in Colorado’s Piceance basin. Last October, the company acquired natural gas assets in the area for $590 million.

Energy Capital formed Summit Midstream in 2009 to focus on acquiring and developing energy assets across North American oil and gas production basins and import centers. Energy Capital sold an 11 percent stake in Summit Midstream in August 2011 to GE Energy Financial Services but remains the majority owner of the company.

The company invests in natural gas gathering pipelines, treating, compression, and processing facilities, according to its website. Summit has the capacity to build, buy, or partner on projects ranging from $50 million to over $2 billion.

Energy-focused private equity firms have been investing heavily in natural gas assets in 2012. Earlier this month, Riverstone Holdings partnered with oil and gas services company Kaiser Midstream to invest up to $500 million in newly created Sage Midstream. The transaction marked Riverstone’s eighth announced investment from its fifth fund, which has raised more than $5 billion toward a $6 billion target.

Energy Capital Partners is currently raising its first energy-focused mezzanine fund, which is expected to close on or above its $500 million target in the coming weeks, a source with knowledge of the situation previously told Private Equity International. The fund has an $800 million hard-cap.

Energy Capital Partners was founded by Doug Kimmelman, Scott Helm and Thomas Lane, all Goldman Sachs alumni, in 2005.