Apollo launches JV with Fortress Energy on LNG; Secondaries reopens to energy

Apollo is investing $175 million in Summit Ridge Energy.

Happy Wednesday Hubsters!

This is Chris for Wire Wednesday.

We have a few things on the energy transition for you this morning. Speaking of energy topics, I’ve noticed an uptick in interest in energy-related secondary deals, whether that’s LPs selling stakes in energy funds, or processes by which GPs try to extend their holds over energy assets.

“Oil is way up, pricing has recovered a bit, not a ton, so it’s good if you’re trying to sell energy assets. Optically, it’s probably a pretty good value play,” a secondary buyer told me recently. “But, do oil prices stay where they are?”

As well, some traditional secondary buyers likely won’t be touching oil and gas assets due to an increased focus on ESG, the buyer said. “That’s caused a number of people to shy away from being too involved in oil and gas.” What are you seeing? Hit me up at cwitkowsky@buyoutsinsider.com.

Transition: Apollo Global Management recently formed a joint venture with New Fortress Energy to create a platform providing infrastructure for delivery, storage and regasification of liquefied natural gas (LNG).
The JV is underpinned by long-term contracts, benefitting from New Fortress Energy’s LNG downstream operations and development activities as well as Apollo’s investment and maritime experience, writes Obey Martin Manayiti on PE Hub today.

“We believe LNG is a critical enabler for energy transition, decarbonization, energy security and reliability for global economies,” Fierstein told PE Hub. “For us to invest behind the critical assets that facilitate its use, we think it’s an attractive investment opportunity and a key part of our sustainable investing thesis.”

The JV consists of 11 vessels, among them six Floating Storage and Regasification Units (FSRU). These are ships that intake LNG delivered from carriers, store it, re-gasify it and inject it into pipelines. There are also two LNG Carriers and three Floating Storage Units (FSUs). NFE will receive approximately $1.1 billion in proceeds for the vessels, after accounting for its share of the JV and paydown of existing debt.

The joint venture is focused on owning and operating vessels that enable the import of LNG to markets, including the Caribbean, Latin America, Europe and Asia, serving customers such as state-owned utility companies and other energy companies.

Read more here on PE Hub.

Solar: Apollo also is making a $175 million investment in Summit Ridge Energy, which owns and operates community solar assets. The company expects to continue scaling its projects and geographic footprint with Apollo’s investments.

Community solar is a rapidly growing segment of the renewables market that allows individuals, businesses, nonprofits and other groups to participate in the clean energy economy by subscribing to local solar farms at discounted rates.

Read more here at PE Hub.

That’s it for me! Hit me up with tips n’ gossip, feedback or The Drama at cwitkowsky@buyoutsinsider.com or over on LinkedIn.