Peregrine Midstream Partners

Number of Employees: 35

Peregrine Midstream Partners is a midstream oil and gas company that owns and operates Ryckman Creek, a depleted natural gas reservoir in Wyoming, US. Ryckman Creek is directly connected to 5 pipelines providing direct access to key consumer markets.

Following the completion of construction, which is expected to occur in Q3 2015, Peregrine will provide natural gas storage and related services under contracts of varying length. The facility has a certificated capacity of 53 Bcf and expects to have 35 Bcf of storage capacity online by the end of 2015.

In addition to revenue from storage services, Peregrine also expects to generate incremental revenue from:

  • Providing storage services to power plants or pipelines serving power plants to better meet their hourly load requirement.
  • Park and loan services including utilizing spare system capacity for the temporary storage of natural gas.
  • Working with a gas marketer to capture seasonal spreads and market volatility.
  • Selling oil and natural gas liquids retrieved through enhanced oil recovery.

Peregrine is headquartered in Houston, Texas and was established in 2009 to serve as a platform for the acquisition and construction of midstream oil and gas assets in the US.

Management members have previously founded Falcon Gas Storage, where they successfully constructed and operated two depleted reservoir gas storage facilities, and were in the process of building a third facility before exiting in 2010.

To Peregrine Midstream Partners

Market Trends and Drivers

The need for gas storage depends primarily on the requirement to balance seasonal variation in production supply and consumption demand for natural gas. A fundamental driver is that natural gas is growing in significance as a resource to meet energy requirements of the US as a result of significant increases in actual gas supply and lower prices. Natural gas is also considered an environmentally friendly fuel compared to other fossil fuels.

Investment Potential

It is unusual for EQT to engage in a significant construction project, but Peregrine has an experienced management team who are recognized leaders in natural gas storage in the US. Ryckman Creek is unique due to its location in a natural gas production and consumption region. It is strategically located near the Opal Hub and the facility is directly connected to five key pipelines providing direct access to multiple consumer markets.

The business plan focuses on completing construction of Ryckman Creek and optimizing the commercial contracting of the facility. There is potential to expand the corporate structure to support growth and add personnel to establish the company as a midstream platform. Additional midstream opportunities may be developed and add-on assets such as pipeline networks could be explored to improve operational efficiency, flexibility and profitability of Ryckman Creek.