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EIG Global Energy Partners

eigpartners.com

Founded Year

1982

Stage

Mezzanine | Alive

About EIG Global Energy Partners

EIG Global Energy Partners specializes in private investments in energy and has investment professionals solely dedicated to the sector, many with industry or technical backgrounds. Its clients include many of the leading pension plans, insurance companies, endowments, foundations, and sovereign wealth funds in the US, Asia and Europe. The company was founded in 1982 and is based in Houston, Texas.

Headquarters Location

Three Allen Center 333 Clay Street, Suite 3500

Houston, Texas, 77002,

United States

713-615-7400

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Latest EIG Global Energy Partners News

Origin Energy bidder EIG not fazed by gas threats

Nov 13, 2022

Share Washington| The private equity suitor behind an $18.4 billion bid for Origin Energy says it is willing to ignore government threats of export controls and price caps and invest in Australia for the next 20 years because it believes the nation’s gas resources will play a crucial role in the transition to clean energy. Blair Thomas, chairman of the Washington-based EIG Global Energy Partners, said investors need to be more wary than ever of creeping intervention by governments. However, he says Australia is no different to the rest of the world and he is ready to commit to investing here for at least 20 years. EIG joined Canada’s Brookfield Asset Management in launching the surprise bid on Thursday morning. Brookfield says it wan ts to invest $20 billion to accelerate Origin’s decarbonisation in the current decade. Mr Thomas told The Australian Financial Review that the world’s energy markets would be unrecognisable within a decade and cautioned environmentalists and governments that volatility in prices would hamper their decarbonisation efforts. Blair Thomas of private equity firm EIG is betting big on the role of gas in the energy transition. EIG, which has invested $US41.5 billion ($62 billion) in global energy – including Aramco’s oil pipelines, which carry one in eight barrels of the world’s daily oil consumption – is using a strengthening US dollar as a motivation to jump into the Australia market. But Mr Thomas said the group would remain disciplined on pricing assets and would steer away from development projects due to their lack of financial support. Advertisement “We’re long-term believers in Australia, or we wouldn’t be pursuing this transaction,” Mr Thomas said. “We’re making a 20-year bet here on this strategy. The [political and regulatory] pressures, certainly, they’re prevalent in Australia right now. But we’re really seeing them around the world. “It does make it challenging and tricky from an investment standpoint, and you do need to keep an eye on the regulatory environment, the fiscal environment and political risk more than you historically would have, but that’s a phenomenon that’s happening around the world.” Last month, Treasurer Jim Chalmers added to his recent regulation in the gas markets by confirming his Treasury department would look at potentially taxing energy giants tens of billions of dollars extra a year via changes to the petroleum resource rent tax (PRRT) . However, Mr Thomas noted that EIG – which celebrated its 40th anniversary last year as a specialist energy investor – was an investor in the UK, where a windfall profit tax had been enacted, and was also an investor in Germany, where market interventions had been made. While comfortable with the regulatory settings, he warned environmental groups and governments to be careful about creating too much disruption to markets. “People need to recognise that this is a transition and that gas is the key fuel to make it happen. So it’s in everybody’s interest that we provide security and price stability – otherwise, there’s a real risk that the public turns on decarbonisation, and then we’re all losers.” Advertisement “So even the most fervent environmentalists should recognise that price stability is in their interest,” he said. EIG and Canadian bid partner Brookfield Asset Management’s top-shelf $9-a-share bid for Origin was immediately labelled a “knockout” by analysts and won a provisional nod from the company’s board. The parties will conduct due diligence over eight weeks. The US dollar, which has risen 14 per cent against the Australian dollar since March, has created a good opportunity to secure Australian assets, Mr Thomas said. “I’d be lying if I didn’t say that that foreign exchange rates didn’t factor into our thinking.” But that was no excuse to be ill disciplined on pricing for Origin Energy, where EIG has already revised its bid twice. Treasurer Jim Chalmers says there’s a public appetite for changes to petroleum taxation that would raise more money. AP, Alex Ellinghausen Advertisement EIG-backed Harbour Energy, which Mr Thomas also chairs, left Australia empty-handed in 2018 after a year of chasing the gas assets of producer Santos . Harbour was forced to bid against itself five times, including twice over one weekend, leaving Mr Thomas infuriated, saying there was an “unwillingness” by Santos’ board and “no meaningful attempt by Santos to discuss a realistic price”. While the Origin Board has given a provisional approval for EIG’s latest bid, Mr Thomas told the Financial Review the private equity giant would remain firm on pricing. “At the end of the day you never sacrifice discipline. The Santos transaction was part of this same strategy, the same belief in the role of LNG, and from that standpoint, this [deal] is a continuation of that.” “We have high conviction about Australia and the role that Australia plays in a broader global strategy. And yes, we want to win.” The attraction for EIG to Origin is that the assets are operational, not in development stage, and therefore have strong long-term customer contracts and lower risk. “The bigger issue from my standpoint is most people don’t know what the energy landscape is going to look like 20 years from now. Advertisement “So that’s part of the reason why I think [development projects] are struggling to get financed. I have not seen that with respect to operating assets.” Major banks around the world have been pulling finance for some fossil fuel development projects, most notably in coal and to a lesser extent oil, but Mr Thomas saw no signs of that for gas as yet. “I do believe the market makes a big distinction between natural gas and coal, and to a lesser extent, oil. And so you know, on that continuum of public pushback, to be honest with you, we’re really not seeing it on gas yet.” The private equity group, which usually holds investments for seven years before on-selling them, is looking for a longer-term play in Origin’s assets. “If it’s something that goes in one of our funds, it’s typically in that seven- to eight-year timeframe. That’s not what we’re doing here. “We formed a new company, MidOcean, and that company is perpetual. So there’s no defined exit timeframe on this. Ultimately, we’re going to build MidOcean into a big company and then in all likelihood we will list that somewhere.” Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter . Email Matthew at mcranston@afr.com Save

EIG Global Energy Partners Frequently Asked Questions (FAQ)

  • When was EIG Global Energy Partners founded?

    EIG Global Energy Partners was founded in 1982.

  • Where is EIG Global Energy Partners's headquarters?

    EIG Global Energy Partners's headquarters is located at Three Allen Center, Houston.

  • What is EIG Global Energy Partners's latest funding round?

    EIG Global Energy Partners's latest funding round is Mezzanine.

  • Who are the investors of EIG Global Energy Partners?

    Investors of EIG Global Energy Partners include Brookfield Asset Management and China Investment Corporation.

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