Global alternative asset manager The Carlyle Group (NASDAQ: CG) today announces it has made a strategic equity investment in Crimson Midstream Holdings a provider of crude oil transportation and storage services that operates more than 2,000 miles of pipeline in the U.S. transporting approximately 400,000 barrels of crude oil per day. This strategic partnership will help enhance Crimson’s support of shippers on its Gulf of Mexico, Louisiana and California pipeline systems and grow its presence in these regions and beyond as demand for U.S. crude export infrastructure increases. Carlyle’s Global Infrastructure Opportunity Fund provided the equity for this investment.
John Grier, Founder and Chief Executive Officer of Crimson, said, “The volume of crude oil being produced in the U.S. is unprecedented. Current pipeline and export infrastructure is insufficient to meet the needs of producers and rising global demand for U.S. oil exports. We look forward to working with Carlyle to build, upgrade and maintain the infrastructure needed to alleviate transportation bottlenecks and accelerate U.S. crude production.”
Ferris Hussein, a Managing Director on Carlyle’s Global Infrastructure team, said, “The U.S. oil industry is undergoing a massive transformation. The Shale Revolution has moved the U.S. from a crude importer to a significant crude exporter. We are pleased to partner with Crimson through this remarkable growth period.”
Crimson is actively expanding U.S. crude export capacity, including development of the Swordfish Pipeline. The binding open season for the Swordfish Pipeline is underway and, once complete, will utilize existing Crimson assets to provide much-needed near-term connectivity for shippers between St. James and Raceland, Louisiana to export markets via the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly, Louisiana.
Crimson is committed to pipeline safety and to applying technologies and best practices to ensure its pipelines are properly monitored and maintained for the benefit of its customers and communities.
Market Overview
U.S. pipeline capacity and export infrastructure has not kept pace with the recent significant increase in domestic crude production. The U.S. added over 1 million barrels a day of crude production in 2018 and is currently producing a record 11 million barrels per day, according to the U.S. Department of Energy. Experts agree that meaningful investment is required to accommodate new crude flows and ensure these volumes have market access. New pipelines need to be built, existing pipelines reversed and export infrastructure constructed. Since the U.S. government lifted its ban on crude exports in December 2015, the total volume of crude exported by U.S. producers has reached as high as 3 million barrels per day, estimated by the U.S. Energy Information Administration.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $212 billion of assets under management across 339 investment vehicles as of September 30, 2018. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Credit and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,625 people in 31 offices across six continents.
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About Crimson Midstream Holdings, LLC
Crimson Midstream Holdings, LLC is a provider of crude oil transportation and storage services in California, Louisiana and offshore Gulf of Mexico. Crimson safely and reliably operates more than 2,000 miles of pipeline transporting approximately 400,000 barrels of crude oil per day to end users. Crimson is led by a management team with deep experience in pipeline operations and management. For further information on Crimson, visit the company’s website at http://www.crimsonmidstream.com/.
