Salt Creek Midstream, an affiliate of ARM Energy, has commenced development of SCM Alpine, a 445,000 barrels per day (bbl/d) capacity natural gas liquids (NGL) header system in the US.
Planned to be commissioned in Q1 2019, the $100m project will be constructed, managed and operated by ARM Midstream Management, an affiliate of ARM Energy.
Simultaneously, Apache Midstream has signed an agreement for an option to acquire a 50% stake in Alpine, which is supported by 10-year commitments from both Salt Creek and Apache.
The term of the commitments, however, can be extended twice for an additional five years for a potential term of 20 years.
ARM Energy CEO Zach Lee said: “This announcement signifies Salt Creek’s extensive relationships in the Delaware Basin and our expanding world-class asset-base.
“We have a deep understanding of the fundamentals driving upstream and midstream economics and their impact on the gulf coast downstream markets.
“We believe Alpine is well-positioned to provide market optionality leading to netback advantages for its customer base.”
The Alpine header system will feature two pipeline segments that originate at both the Salt Creek and Apache processing facilities in southern Reeves County, Texas.
The project will transport the NGLs to Waha, where the pipeline will be interconnected to downstream pipelines to provide access to Mont Belvieu and Corpus Christi fractionation facilities.
Apache Midstream and Marketing senior vice-president Brian Freed said: “The development of this NGL project is another significant step in Apache’s Alpine High infrastructure buildout.
“This project provides Apache access to the emerging Waha market area, increasing the company’s long-term operational flexibility and market optionality.”
In April 2018, ARM Energy partnered with Ares Management to develop Salt Creek in the Delaware Basin.
The two Salt Creek and Alpine projects are owned by funds managed by the Ares Private Equity Group and ARM Energy.