Trace Midstream Partners II has entered into agreement to buy New Mexico midstream company LM Energy Delaware, a portfolio company of Old Ironsides Energy.
Trace Midstream, backed by Quantum Capital Group, will acquire LM Energy’s natural gas gathering system in Eddy and Lea counties, New Mexico. Financial terms of the deal weren't disclosed.
LM Energy is constructing multiple new compressor stations, gathering pipelines and a 20-inch diameter high-pressure transportation pipeline that will connect its existing gas gathering system to a number of gas processing facilities near Loving, New Mexico.
When completed, the system will consist of approximately 170 miles of pipeline and 12 compressor stations, with a total design capacity of 650 MMcf/d. The system has more than 80,000 dedicated acres and is supported by long-term, fixed-fee contracts from multiple producers, Trace Midstream said.
In connection with the transaction, Quantum Senior Advisor Jack Harper has joined the Trace board of directors. Prior to joining Quantum, Harper served as executive vice president, Lower 48 at ConocoPhillips and was a member of its executive committee.
In 2022, Trace successfully exited its previous midstream business with the sale of its Haynesville assets to Williams and its midcontinent assets to Energy Transfer for a combined transaction value of approximately $1.5 billion.
Vinson & Elkins LLP represented Trace in the LM Energy acquisition. Piper Sandler and Co. and Kirkland & Ellis LLP represented LM Energy.