Funds

First reserve partners with Pemex

The agreement will see $1 billion invested in energy in Mexico

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First Reserve has inked a joint venture agreement with Petroleos Mexicanos (Pemex) to invest $1 billion in energy infrastructure opportunities in Mexico.

Petroleos Mexicanos is Mexico’s state owned energy company.

Pemex is said to be aggressively pursuing investment partnerships in order to ease the effects of planned budget cuts at the company this year as a result of lower energy prices.

Both companies plan to target infrastructure investments throughout the country and will combine financing, structuring, and operational options for each deal.

One investment is already underway. First Reserve and Pemex will invest in the Los Ramones pipelines, a project which will create 744 kilometers of natural gas pipeline, with full commercial operations expected in mid-2016. That deal also includes an investment interest from BlackRock – a first for BlackRock. The total investment is valued at approximately $900 million – or 45 percent of the project.

Both Pemex and First Reserve say they will be looking for other “large scale” infrastructure opportunities like Los Ramones.

“Through formal collaboration with Pemex, we feel we have gained substantial access to a region with strong supportive macro dynamics alongside a motivated and accomplished partner,” William Macaulay, chairman and co-CEO of First Reserve said in a statement.

First Reserve has been on an investment spree since closing its latest fund in September of last year. That fund – First Reserve’s thirteenth – closed on $3.4 billion. The fund is smaller than previous funds and also missed a reduced target of $5 billion, but the firm doesn’t appear to be slowing down.

In December, the firm acquired Dallas-based Navigator Energy Services with a $250 million investment. Navigator is building the Big Spring Gateway System pipelines from Texas’ Permian Basin. In January, First Reserve also acquired Kingfisher Wind power project in Oklahoma from Apex Clean Energy for an undisclosed sum.

In February, First Reserve also promoted Alex Krueger to co-CEO and president, in line with the firm’s succession plan, PEI reported at the time. He will work alongside William Macaulay, existing chairman and now co-CEO.