EPIC Midstream, through multiple transactions, will reduce it stakes in the EPIC Crude Pipeline Project and the EPIC NGL Pipeline, to 45% and 75%, respectively.
In the EPIC Crude Pipeline Project, which is scheduled to break ground this month, EPIC Midstream has entered into three different transactions. The company will sell a stake of 30% to Noble Midstream Partners, 15% stake to a subsidiary of Altus Midstream, and a 10% stake to Rattler Midstream, a subsidiary of Diamondback Energy, in the crude oil pipeline to be built in Texas.
The 1126km long EPIC Crude Oil Pipeline will be laid from Orla to the Port of Corpus Christi. It is expected to have initial throughput capacity of 590,000 barrels per day sourced from the Permian Basin.
The crude oil pipeline project will see construction of some terminals with Port of Corpus Christi connectivity and export access. The EPIC Crude Oil Pipeline is targeted to begin operations by January 2020.
In the EPIC NGL Pipeline, Noble Midstream will acquire a stake of 15%. The remaining 10% stake in the natural gas liquids (NGL) pipeline is held by Salt Creek Midstream.
EPIC Midstream said that all the transactions are likely to be closed this month, subject to meeting of certain preceding conditions.
EPIC Midstream CEO Phillip Mezey said: “The strategic value of these projects to our shippers is clear through the exercising of the options by our partners.
“Both projects remain on schedule and are critical to the continued development of the Permian Basin and Eagle Ford Shale.”
The 24inch EPIC Y-Grade Pipeline, which is also about 1126km long, connects NGL reserves in the Permian and Eagle Ford with refiners, petrochemical companies, and export markets along the Gulf Coast. It will have a throughput capacity of around 440 MBbl/d with various origin points.
Construction on the NGL pipeline is scheduled to be completed in the third quarter of 2019.
Noble Midstream expects to invest nearly $165-180m in the EPIC Y-Grade Pipeline and $330-350m for the EPIC Crude Oil Pipeline.
Noble Midstream’s general partner CEO Terry Gerhart said: “These additions are complementary to our existing portfolio, enhance our customer diversification, and will add a stable and high-quality source of cash flow from a premier U.S. unconventional basin.
“In addition, Noble Midstream is uniquely positioned to realize value across the entirety of the crude oil value chain, from our wellhead gathering facilities in the Delaware Basin to long-haul transportation to the Gulf Coast.”