OMERS is investing $1.44bn (€1.24bn) for a 50% stake in a crude oil pipeline business jointly owned by Midstream Partners and Plains All American Pipeline.
The Canadian pension fund’s infrastructure investment manager said it will become the largest shareholder of BridgeTex Pipeline Company with the acquisition of a 30% interest from Plains and a 20% interest from Magellan.
Plains will retain a 20% interest, and Magellan will continue to operate the BridgeTex pipeline and own a 30% interest.
BridgeTex pipeline provides crude oil transportation from Colorado City in West Texas to refineries in Houston and Texas City as well as for marine export through the Houston Ship Channel.
Michael Ryder, a senior managing director, Americas, for OMERS Infrastructure, said: “OMERS investment in BridgeTex is consistent with our strategy of building significant, long-term investment partnerships with leading corporations, and marks our re-entry into the attractive US midstream energy sector.
“We’re very excited to join Plains All American and Magellan as co-owners and look forward to working together to support future operations of the BridgeTex pipeline.”
Ralph Berg, OMERS Infrastructure’s executive vice president and global head, said: “Around the world, OMERS Infrastructure is singularly focused on owning vital, large-scale infrastructure assets that will best position our portfolio to deliver strong, consistent returns to OMERS members for many years to come.
“BridgeTex is yet another example of this strategy and brings another high-performing energy asset into our growing North American infrastructure portfolio.”
The acquisition of BridgeTex is the third major investment in US energy infrastructure for OMERS this year.
In March, OMERS Infrastructure agreed to buy wind power operator Leeward Renewable Energy. Earlier this month, OMERS also said it intends to buy a 24% stake in Puget Holdings, owner of Puget Sound Energy, a regulated energy utility provider.
Globally, OMERS Infrastructure manages around $17bn of assets.