Petrofac, the international service provider to the oil and gas industry, has entered into a Framework Agreement with First Reserve, the global energy-focused infrastructure investment firm, to create PetroFirst Infrastructure Partners.
The new venture intends to deploy capital both in purchasing a number of existing assets from Petrofac’s Integrated Energy Services (IES) division, as well as in new energy infrastructure projects that utilise Petrofac’s development capability.
The new venture is anticipated to be funded 80% by First Reserve and its investors, with Petrofac retaining the balance of ownership. Up to US$1 billion is expected to be committed by the First Reserve Energy Infrastructure Funds and its investors and Petrofac expects to contribute up to a maximum of US$250 million in the form of existing assets and cash. The gross investment capacity of the new venture is expected to be significantly increased through debt leverage available to infrastructure investments.
Ayman Asfari, Petrofac Group Chief Executive, stated:
We are delighted to have signed this agreement with First Reserve. As recently stated, we have re-focused our IES business development plans and this innovative venture reinforces the positioning of IES as an enabler for the Petrofac group, allowing us to concentrate our resources on our core strengths and underlining our commitment to capital discipline.
Rob Jewkes, Chief Operating Officer, Integrated Energy Services, commented:
In addition to releasing capital from our currently deployed assets, the agreement opens up future opportunities to create value for our customers that require access to capital alongside Petrofac’s proven execution capability. We are seeing a clear shift in the industry to contracted and shared infrastructure models and this initiative will facilitate our ability to support our clients with this offering.
Bill Macaulay, First Reserve Chairman and CEO, stated:
The creation of PetroFirst Infrastructure Partners represents an exciting opportunity to invest in energy infrastructure alongside a partner with a proven track record for project execution. The Fund will benefit from an investment in long-term contracted assets with strong support from Petrofac and its leading energy sector customers. We look forward to working together with Petrofac on what we expect will be a rewarding collaboration.