Pennsylvania-based Keystone Clearwater Solutions LLC, a water management firm working in the Appalachian Basin, is again changing hands via an acquisition by SC Water LLC.
Pennsylvania-based SC Water agreed to acquire Keystone from New Jersey-based water and wastewater utility American Water Works Co. Inc. for an undisclosed price. SC Water, which invests in the oil and gas sector, said the transaction is expected to close by the end of the year.
Keystone was sold to American Water in 2015 by the now defunct Rex Energy Corp. for $130 million. American Water divested Keystone when it sold its regulated operations in New York to Liberty Utilities.
Keystone manages temporary and permanent water pipeline projects for natural gas production and completion operations throughout Appalachia, among other services. Following the acquisition, the company is to form a partnership with SC Water affiliate Hydro Recovery LP, a water treatment, recycling and transportation company that works in Appalachia.
“This partnership reflects Hydro Recovery’s commitment to providing our natural gas and oil industry customers with a deep portfolio of water solution services that meet their unique needs,” said Hydro CEO Thomas Stabley, who once led Rex Energy.
The transaction comes at a time when Appalachian producers are working to control costs in a low-price gas environment. Producers across the Lower 48 also are working to secure water for production and deal with produced water management.
Both produced and fresh water were historically handled by exploration and production companies as disposal or supplies were needed, with trucks handling the bulk of the work.
While pipelines have handled some water volumes, the midstream and upstream sectors are at work to expand infrastructure and secure longer-term agreements. The trend has created opportunities for both midstream operators and water management companies, leading to a number of transactions this year.