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Ex-Enron executives form Midstream Capital

by Claire Poole | Published February 6, 2013 at 4:09 PM

Boston private equity firm Energy Investors Funds said Wednesday, Feb. 6, it's partnering with Midstream Capital Partners LLC to identify and develop investment opportunities in the energy midstream space in the U.S., initially natural gas gathering systems. Financial terms weren't disclosed.

Two of the three principals of Midstream Capital are ex-Enron Corp. executives, most notably Lou Pai, who was CEO of Enron Energy Services but resigned and cashed out of $300 million in Enron stock six months before it filed for bankruptcy in 2001. In 2008 Pai agreed to pay $31.5 million in fines and disgorged profits after the Securities and Exchange Commission charged him with selling stock based on material, non-public information, although he neither admitted nor denied the charges.

Most recently Pai was founder and chairman of Element Markets, a renewable energy company.

The other Midstream Capital principals are Richard Kieval, who worked in commodities and risk management at Enron, and Dale Miller, previously at Purvin & Gertz Inc. and IHS Inc.

EIF managing director Terence Darby said in a statement that Midstream Capital has some of the "brightest minds" in the midstream space, and with the shale boom in the U.S. underway, there are numerous opportunities to invest in physical infrastructure to transport natural gas.

Akin Gump Strauss Hauer & Feld LLP's Jay Worenklein counseled EIF.

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