Enable Midstream Partners has agreed to acquire Velocity, a crude oil and condensate gathering and transportation company operating in the Anadarko Basin, for $442m.
The acquisition of Velocity is expected to consolidate the natural gas gathering and processing infrastructure position of Enable Midstream in the SCOOP and Merge plays. According to Enable Midstream, the two regions have attracted substantial producer activity and possess some of the best well economics in the US.
The crude and condensate system of Velocity is made up of nearly 80kms of pipeline with a capacity of around 225,000 barrels per day (bpd) in addition to more than 400,000 barrels of owned and leased storage and 26 truck bays capable of unloading over 100,000 bpd.
Through the acquisition, Enable Midstream, will also add Velocity’s 60% stake in a 42km long pipeline system joint venture with a third party that is the owner and operator of a refinery connected to the Velocity system.
Velocity’s operations are supported by large area dedications to go along with long-term, fee-based contracts with more than two million acres dedicated from shippers, including acreage dedications from leading producers in the SCOOP and Merge plays.
In a separate development, Enable Midstream signed new contractual commitments in the Williston Basin for a major expansion of its crude and water gathering systems. The expansion has been driven by significant producer activity and a backlog of drilled but uncompleted wells from more than 90,000 gross acres of dedication, said the midstream operator.
Enable Midstream president and CEO Rod Sailor said: “The Velocity acquisition builds on Enable’s market-leading Anadarko Basin midstream platform that now offers customers complete wellhead-to-market solutions for both natural gas and crude.
“The combination of the Velocity acquisition and the expansion of our Williston Basin assets increases the scale and contribution of our crude and water businesses, providing for fee-based growth as producers continue to target crude oil production.”
Last month, Enable Midstream Partners revealed its plans to develop the Gulf Run Pipeline project, a new interstate natural gas transportation project to be built in Louisiana with an investment of $550m.