The acquisition includes an existing gathering system and a 150-mile gathering pipeline, which is currently under construction. The latter is expected to be commissioned in the first half of next year. Upon its completion, DTE Midstream will also have a $400 million milestone payment to make.
The Louisiana assets gather natural gas produced in the Haynesville shale basin and access multiple major downstream pipelines, including those serving the Gulf Coast.
According to DTE Energy’s CEO Jerry Norcia, the acquisition “checks all of our boxes.” It enhances the “strength and diversity of DTE Midstream, adding premium assets in one of the largest growing and best positioned U.S. shale formations.”
The assets are supported by long-term contracts – a remaining 13.5 years for the existing gathering system and a 10-year contract for the large diameter gathering pipeline under construction.
The transaction is expected to close by year-end.