Pipeline investors bolster case for growing their strategic fund

By Luke Geiver | July 23, 2019

NEP Midstream & Royalties has increased its pipeline asset portfolio. Through a deal in the Texas counties of Howard and Martin, the Dallas-based pipeline and energy investment firm, has added both royalty interests and affiliated pipeline infrastructure in the counties.

NEP has formed the Strategic Pipeline Income Fund for accredited investors. The fund is meant to capitalize on the continued, and growing, need for pipelines to move oil, gas and ethanol across the U.S. NEP touts the fund’s non-reliance on the price of oil. Income from the fund is generated on the volume of product transported not the price of the commodity.

NEP believes that over the next decade the return on investment for U.S. oil and natural gas assets will continue to outperform traditional asset classes with additional in-house investments made over the next several years. In Texas, the recent asset buys are affiliated with Encana Energy and XTO Energy, both major exploration and production companies active in the area.

With an objective to deliver a 12 percent tax-advantaged annual dividend, the Strategic Pipeline Income Fund invests in high-quality pipelines, energy infrastructure, and landowner royalties in the rapidly growing areas of the Bakken Shale, Permian Basin, and Eagle Ford Shale, according to NEP.