BlackRock takes ownership of First Reserve's Mexican assets

BlackRock takes ownership of First Reserve's Mexican assets

Mexico M&A Project & Infrastructure Finance

BlackRock will assume ownership of First Reserve's three energy assets in Mexico as part of an agreement to acquire the US private equity firm's energy infrastructure portfolio for an undisclosed amount.

First Reserve owns a low-sulfur gasoline processing plant in Mexico, along with Los Ramones II natural gas pipeline and La Bufa wind farm. The firm has roughly $3.7bn in two energy investment funds, BlackRock said in a statement.

First Reserve negotiated a sale-leaseback with Mexico's state-owned oil company Pemex for the gasoline plant last year. Pemex pays rent to operate the plant under a 20-year contract.

The private equity firm is partners with Mexico Power Group (MPG) on La Bufa wind farm in Zacatecas, backed by a 20-year power purchase agreement with Volkswagen.

BlackRock and First Reserve agreed in March 2015 to buy a 45% stake in Los Ramones II for $900m. The 744km pipeline between northern Mexico and Guanajuato has a 25-year take-or-pay agreement with Pemex.