Diamondback Power Inc. and Kinetik Holdings Inc. have signed agreements to promote every of their 27.5 p.c stakes in EPIC Crude Holdings LP to Plains for round $1.57 billion.
Plains will turn into the bulk proprietor with a 55 p.c curiosity in EPIC Crude Holdings, proprietor of the EPIC Crude Oil Pipeline. Ares Administration Corp.’s EPIC Midstream Holdings LP will retain an working stake of 45 p.c.
Stretching 800 miles, the pipeline system carries Delaware Basin and Midland Basin provide from places close to Crane, Midland, Orla and Wink, Texas, and Eagle Ford provide from places close to Gardendale and Hobson, Texas. The pipeline system delivers the oil to EPIC Crude Holdings’ 3.4-million-barrel Robstown Terminal close to Corpus Christi, in accordance with EPIC Midstream.
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The pipeline system, which grew to become totally operational April 2020, has a nameplate capability of 600,000 barrels per day (bpd), expandable as much as a million bpd, and practically seven million barrels of operational storage, in accordance with EPIC Midstream.
The property enhance Plains’ Permian wellhead to water technique, Plains mentioned in a press release on its web site, noting the pipeline system is “underpinned by long-term minimal quantity commitments from high-quality clients”.
“This transaction strengthens our place because the premier crude oil midstream supplier, enhances our asset footprint and enhances our buyer providing”, mentioned Plains chair, chief govt and president Willie Chiang. “The mix of our stake in EPIC Crude Holdings coupled with our present built-in Permian and Eagle Ford property enhances our dedication to providing a excessive degree of connectivity and suppleness for our clients.
“By additional linking our Permian and Eagle Ford gathering programs to Corpus Christi, we’re enhancing market entry and guaranteeing our clients have dependable, cost-effective routes to a number of demand facilities”.
Plains agreed to pay Diamondback and Kinetik an extra $193 million ought to an enlargement of the pipeline system to a capability of not less than 900,000 bpd be sanctioned earlier than the tip of 2027.
Diamondback and Kinetik acquired their stakes solely final 12 months.
“This can be a nice end result for Diamondback, producing a significant return on our invested capital”, Diamondback chief govt and director Kaes Van’t Hof mentioned in a separate assertion.
“We look ahead to sustaining our sturdy industrial relationship with the EPIC Crude and Plains groups as an anchor shipper on the EPIC Crude pipeline”.
Kinetik president and chief govt Jamie Welch mentioned, “The transaction represents a compelling alternative to advance our dedication to maximise long-term shareholder worth by recycling proceeds from non-core asset gross sales to enticing progress initiatives and potential acceleration of shareholder returns”.
The events anticipate to finish the transactions early 2026 topic to customary closing situations together with federal antitrust clearance.
Earlier this 12 months EPIC Midstream divested its pure fuel liquids pipelines, fractionation amenities and distribution programs to Phillips 66 for about $2.2 billion.
To contact the creator, e mail jov.onsat@rigzone.com
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