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Morgan Stanley Private Equity, Sterling Energy enter strategic partnership

Morgan Stanley Private Equity has entered a strategic partnership with Denver-based Sterling Energy by investing in a newly formed company, Sterling Investment Holdings.

The majority equity investment is intended to support the growth of Sterling Energy’s natural gas gathering and processing infrastructure and related services business in Colorado and North Dakota, according to Morgan Stanley.

The companies’ management team have previous experience of collaboration in a series of successful midstream companies including Cantera Natural Gas, Canyon Gas Resources, Highlands Gas Corporation and Mountain Gas Resources.

Sterling Energy CEO Bill Penney said the partnership will strengthen the company’s long-term strategic plans to expand existing business.

Sterling Energy provides its services through two gathering systems the Yenter System and Niobrara production in northeast Colorado, and the Ambrose System, serving Williston and Bakken/Three Forks production in Divide County, North Dakota.

The energy company said it has begun a multi-year construction project to extend and expand its Yenter System into the Pony Area of the Niobrara Field. The company has also proposed an expansion of its Ambrose System.

The expansion will be to accommodate nearby natural gas being flared from existing wells, as well as projected new volumes from development in the area, according to Sterling.