Williams has agreed to form a joint venture with Brazos Midstream that will comprise oil and gas pipelines, processing plants and storage assets located in the Delaware Basin.
As per the agreement terms, Williams will contribute its existing assets in the Delaware Basin to the joint venture, in return of a minority ownership of 15% in the partnership. The assets contribution from the company will expand the reach of the existing Brazos Midstream’s system.
Further, the combined capabilities of the joint venture will offer existing and prospective customers with an improved suite of midstream services.
As part of the agreement, the partners have also signed an agreement to jointly develop natural gas residue solutions to cater to producers in the Delaware Basin.
Brazos Midstream, which will have a stake of 85% in the joint venture, will operate about 1166km of gas gathering pipelines, 260 MMcf/d of natural gas processing, 120km of crude oil gathering pipelines, and 75,000 barrels of oil storage.
The assets are located in Reeves, Loving, Ward, Pecos, Winkler, and Culberson counties in Texas.
Apart from that, Brazos Midstream is currently engaged in the construction of the 200 MMcf/d Comanche III natural gas processing plant, which is slated to be fully operational by first quarter 2019. Upon its commissioning, the new gas processing plant will take the joint venture’s total operated processing capacity to 460 MMcf/d in the Delaware Basin.
Williams corporate strategic development senior vice president Chad Zamarin said: “We are pleased to partner with Brazos Midstream on this joint venture. Their high-quality gathering pipelines and processing assets, combined with their industry-leading capabilities in Reeves, Ward, and Pecos counties are an excellent match for the gathering systems and additional capabilities that Williams is contributing as part of this transaction.”
The joint venture has the backing of more than 500,000 acres of long-term dedications that are presently under full-field horizontal development from multiple oil and gas producers.
Brazos Midstream CEO Brad Iles said: “We are excited to form this joint venture with Williams and greatly appreciate the confidence they have in Brazos to entrust us with operatorship of their assets and stewardship of their customers.
“Williams is well-known as one of the nation’s premier natural gas midstream companies, and we believe this partnership will greatly enhance both companies’ efforts to develop top-tier assets in the Permian Basin.”
Earlier in the year, Brazos Midstream sold its Delaware Basin subsidiary companies to Morgan Stanley Infrastructure-managed North Haven Infrastructure Partners II and related funds for about $1.75bn.