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South Korean consortium acquires 50 per cent interest in Utopia Pipeline from Riverstone Holdings

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Shinhan Investment Corp (Shinhan), Samtan Co (Samtan), EIP Investment Co (EIP Investment) and KDB KIAMCO, a South Korean-based consortium of infrastructure investors, has acquired a 50 per cent ownership interest in the Utopia Pipeline (Utopia) from investment funds affiliated with Riverstone Holdings.

Originating in Harrison County, Ohio and delivering to the Sarnia petrochemical market in Ontario, Canada, Utopia is a recently-constructed 268-mile pipeline that transports ethane sourced from the Marcellus and Utica shales. In 2016, Riverstone formed a joint venture with Kinder Morgan Inc. (Kinder Morgan) to construct Utopia. Kinder Morgan will remain the pipeline’s operator and continue its ownership in the joint venture.
 
Heejun (June) Park, President of EIP Investment, says: “Samtan is a leading energy company in Korea with significant experience investing in power and infrastructure assets around the world and Shinhan Financial Group is a leading financial institution in Korea. Samtan and the EIP Private Equity Fund, which is backed by Shinhan Financial Group, created a joint venture for this transaction to invest in Utopia in partnership with Kinder Morgan. This transaction represents a landmark investment for our funds and we are pleased to be partners with a world-class operator. Since 2017, there have been large inflows of investments in US midstream assets by Korean strategic and institutional investors, and we expect this trend to continue.”
 
John Jessup, Principal at Riverstone, says: “Utopia is a unique midstream infrastructure asset that benefits from strong supply-push and demand-pull fundamentals. Riverstone is glad to have partnered with Kinder Morgan on this project, the success of which was made possible by their broad capabilities from commercial development to project execution.”
 
CIBC Capital Markets acted as exclusive financial advisor and Lee & Ko and Winston & Strawn acted as legal advisors for the Consortium. Additionally, the Consortium has entered into a credit agreement with CIBC Capital Markets, ING Capital and Société Générale to provide debt financing to support the transaction.
 
Morgan Stanley & Co and Vinson & Elkins acted as exclusive financial and legal advisors, respectively, to Riverstone.

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