UGI Expands Midstream Operations with $120 Million Acquisition of Superior Midstream Appalachian

UGI Expands Midstream Operations with Strategic Acquisition

UGI Corporation, through its subsidiary UGI Energy Services, LLC, marks a significant step in enhancing its midstream capabilities with the recent acquisition of Superior Midstream Appalachian, LLC by Pine Run Gathering LLC for $120 million. This acquisition is entirely financed through debt and represents a strategic move for Pine Run Gathering, which is primarily owned by Stonehenge Energy Resources III, LLC (51%) and UGI Corporation's subsidiary (49%). The acquisition is a pivotal expansion as Superior Appalachian operates three extensive gathering systems in Pennsylvania—Pittsburgh Mills, Snow Shoe, and Brookfield—collectively capable of managing a daily flow of approximately 190 million cubic feet of natural gas.

The integration of Superior Appalachian's Pittsburgh Mills system with UGIES’ existing Big Pine gathering system creates notable operational synergy. This connection is expected to enhance UGI’s efficiency in transporting natural gas from producers to end-use customers, thereby solidifying its position in the Appalachian basin. Patrick Redalen, President & CEO of Stonehenge, expresses optimism regarding the energy sector's potential, emphasizing the strategic nature of this acquisition. UGI’s President & CEO, Bob Flexon, echoes this enthusiasm, indicating that the deal not only strengthens their midstream operations but also extends their operational reach, which is crucial in meeting growing energy demands.

This acquisition underscores both UGI and Stonehenge's commitment to exploring growth opportunities within the midstream sector. Following the transaction, Stonehenge will operate five natural gas gathering systems across western and central Pennsylvania, further enhancing its footprint in a rapidly evolving energy landscape. The collaborative effort in this acquisition, with legal support from Baker Botts L.L.P. and Vinson & Elkins LLP, alongside financial backing from BOK Financial, Cadence Bank, and Citizens Bank, showcases a robust partnership dedicated to delivering energy solutions effectively.

In addition to reinforcing UGI’s midstream capabilities, the acquisition highlights the company's proactive approach towards expanding its infrastructure in response to market dynamics. As energy needs continue to evolve, UGI aims to position itself as a leader in the natural gas sector, providing reliable service to its customers while remaining committed to sustainable growth. This move is not just a financial transaction; it represents a strategic alignment of resources and capabilities crucial for navigating the complexities of the energy market.