ArcLight Announces Closing of $407 Million Continuation Fund for Third Coast

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Jan 23, 2023, 08:30 ET

BOSTON, Jan. 23, 2023 /PRNewswire/ -- ArcLight Capital Partners, LLC ("ArcLight") today announced the successful completion and final close of ArcLight 3C SPV, L.P. a continuation fund with $407 million in capital commitments (the "Fund"). In July, the Fund held its initial closing and acquired the remaining 25.1% interest in Third Coast Super Holdings, LLC ("Third Coast") from an affiliate of ArcLight Energy Partners Fund V, L.P. ("Fund V"). The Fund held additional closings through December 2022 bolstering available committed capital for follow-on growth opportunities in the portfolio. The Fund's investor base is comprised of sophisticated global asset management, insurance, and pension plan institutions.

Third Coast is the premier, privately owned U.S. Gulf Coast and Gulf of Mexico midstream infrastructure platform focused primarily on serving eastern deepwater and shallow water Gulf of Mexico producers with access to gulf coast markets. The Fund is supported both by Fund V investors as well as new limited partners, offering Fund V investors the opportunity to either monetize their remaining interest in Third Coast or to continue to participate in the Third Coast business along with new identified expansion and growth opportunities. In addition, the Fund provides new investors with the opportunity to participate in a unique operating platform with substantial growth opportunities.

Third Coast owns interests in midstream energy infrastructure assets in the Gulf of Mexico, the lowest cost and lowest carbon intensive energy basin in the country, including approximately 1,200 miles of interstate and intrastate pipelines, the Delta House Floating Production System (FPS), the recently completed King's Quay FPS, and the Pascagoula Gas Processing plant. Deepwater Gulf of Mexico production is a significant contributor to U.S. crude oil supplies representing over 15% of national production, and importantly, Gulf of Mexico production has the lowest carbon intensity in the U.S. and second lowest carbon intensity in the world, primarily due to restrictions on flaring and venting of natural gas production. Third Coast's integrated natural gas and liquids pipeline systems provide mandated gas and liquids takeaway capacity, providing flow assurance and transmission services to its producer customers.

"Third Coast provides a critical link in the domestic energy value chain connecting the prolific and low-carbon Gulf of Mexico production basin to Gulf Coast customers and markets," said Joe Alves, Managing Director at ArcLight. "We are excited to continue to invest in the Third Coast platform via the Fund as we believe Third Coast's fee-based throughput business model is poised to benefit from continued Gulf of Mexico production growth catalyzed by its lower relative costs and environmental impact, as well as bolt-on organic and inorganic growth opportunities identified by our top-class management team designed to increase redundancy and flow assurance for our customers." Barclays Capital Inc. and RBC Capital Markets acted as co-financial advisors to ArcLight in connection with the transaction.

About ArcLight

ArcLight was founded in 2001 and is a leading middle-market sustainable infrastructure investor with a long-term, successful track record across 7 investment funds. Since inception, ArcLight has invested approximately $27 billion in 123 transactions, including over $16 billion of equity into the power, renewables, strategic gas and transformative infrastructure sectors. Based in Boston, the firm's investment team employs a value-added, operationally intensive investment approach that benefits from its dedicated in-house technical, operational, and commercial specialists and partners, as well as the firm's approximately 1,800-person asset management strategic partner. More information about ArcLight can be found at www.arclight.com.

About Third Coast

Headquartered in Houston, Texas, Third Coast is a full-service midstream company with assets that provide critical infrastructure linking primarily natural gas production to end-use markets. Third Coast's vertically and horizontally integrated assets are strategically located along the Gulf Coast and in the Gulf of Mexico. Third Coast currently owns or has an ownership interest in approximately 1,200 miles of interstate and intrastate pipelines, as well as ownership in a gas processing plant, and two offshore semi-submersible floating production systems with a combined processing capacity of up to 185 MBbl/d of crude oil and 340 MMcf/d of natural gas. For more information about Third Coast, visit www.third-coast.com.

SOURCE ArcLight Capital Partners