Trace Midstream Acquires LM Energy’s Delaware Basin Gas Gathering, Transportation Assets
(P&GJ) — Trace Midstream Partners II has reached an agreement to acquire LM Energy Delaware LLC's natural gas gathering and transportation assets in the Northern Delaware Basin, located in Eddy and Lea counties, New Mexico.
This acquisition includes LM Energy's comprehensive pipeline network, which features high- and low-pressure pipelines, compression, dehydration, condensate handling, and vapor recovery systems.
LM Energy is currently expanding its infrastructure with new compressor stations, pipelines, and a 20-inch high-pressure pipeline connecting to gas processing facilities near Loving, New Mexico. Once completed, the system will span approximately 170 miles and include 12 compressor stations, with a total capacity of 650 million cubic feet per day. It covers over 80,000 dedicated acres and benefits from long-term, fixed-fee contracts with multiple producers.
“This acquisition marks a significant milestone for Trace as we enter the Northern Delaware Basin. We are excited to build upon LM Energy’s already well-executed system and track record of success,” Josh Weber, Trace CEO, said. “With substantial natural gas midstream constraints across the Northern Delaware, we are committed to expanding LM Energy’s assets and providing additional services for the region’s producers.”
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. Earlier in his career, Harper served in various executive roles at Concho Resources, including as President from 2017 to 2021, until the company merged with ConocoPhillips.
Formed in 2017, Trace Midstream has a proven track record of success in the development and operations of large-scale midstream infrastructure projects. In 2022, Trace successfully exited its previous midstream business with the sale of its Haynesville assets to Williams and its Mid-Continent 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.
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