Private equity firm BP Energy Partners LLC (BPEP) has closed on the sale of Mesa Natural Gas Solutions LLC, a power solution company aimed at helping producers reduce volumes of flared natural gas.
BPEP said it had closed the sale of Mesa for an undisclosed amount shortly after Houston-based Arroyo Investors announced it would be integrating Mesa into its portfolio of natural gas and natural gas liquid investments.
Mesa specializes in supplying natural gas and liquid propane-powered mobile generators that provide power in remote locations. Its technology also has been increasingly used by exploration and production (E&P) companies to convert flared natural gas to power operations.
“The sale concludes a successful partnership between BPEP and Mesa in organically building out a leading distributed power business that has enabled the oil and gas industry to reduce emissions and flaring through electrification,” said BPEP managing partner Alex Szewczyk.
Mesa provides services in most major U.S. basins and shale formations, excluding the Haynesville Shale, and currently generates a combined 450 MW at its customer locations.
As state and federal regulators continue to scrutinize the volumes of gas currently flared at production sites, potentially limiting production growth from regions like the Permian Basin, more E&Ps have been studying economic solutions for using flared gas.
Mesa was formed in 2014 as the first portfolio company of BPEP. Originally sponsored by oil industry veteran T. Boone Pickens, BPEP manages around $500 million in energy investments, including Texas-based Sapphire Gas Solutions LLC. It was co-founded in 2013 by Szewczyk and Michael Watzky.
Arroyo holds investments in projects including Florida-based liquefied natural gas bunkering platform Seaside LNG, oilfield power service provider Life Cycle Power and Mexican natural gas-fired generation facilities.
Arroyo managing director Brandon Wax said the investment in Mesa would help it offer customers more solutions to lower carbon emissions, while being able to branch out to new industries.
“We believe this investment represents a differentiated opportunity for Arroyo to own and operate a company that is well-positioned to improve grid resiliency and supply critical backup power to multiple industry segments including commercial, industrial, healthcare and military customers,” Wax said.
