HOUSTON–(BUSINESS WIRE)–Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood Equity” or “Crestwood”) and First Reserve today announced that Crestwood Permian Basin Holdings LLC (“CPJV” or the “Joint Venture”), a joint venture focused on developing, owning and operating midstream infrastructure in the Delaware Basin, has completed the acquisition of Crestwood’s Willow Lake gathering and processing assets located in Eddy County, New Mexico. The Joint Venture now owns all of Crestwood’s Delaware Basin assets. The Joint Venture will continue to be owned 50% by Crestwood and 50% by First Reserve, a leading global private equity investment firm exclusively focused on energy.
As previously announced, CPJV will build a 200 million cubic feet per day (“MMcf/d”) cryogenic gas processing plant located in Reeves County, TX (the “Orla Plant”) and related infrastructure required to connect the Willow Lake system to the plant (the “Orla Express Pipeline”) and multiple third-party pipelines. Under the terms of the transaction, Crestwood contributed its Willow Lake gathering and processing assets to the Joint Venture at a value of $151 million, and this value will be credited as part of Crestwood’s capital requirements to the expansion projects.
As previously announced, the initial project scope for the CPJV expansion projects will include the Orla Express Pipeline, a 33 mile, 20 inch high pressure line connecting the existing Willow Lake gathering system in Eddy County, NM to the Orla plant. The Orla plant will offer full liquids handling and multiple residue and NGL interconnects. Initial project capital is expected to be approximately $170 million and the project is expected to be placed into service in the second half of 2018.
The Orla Plant is supported by current dedications from existing Willow Lake customers and is strategically located to attract processing volumes in Eddy County, NM as well as areas around the Orla Express Pipeline and the Nautilus system. The Nautilus system is a newly-built gas gathering system serving a subsidiary of Royal Dutch Shell (SWEPI) in Loving and Ward counties, Texas. The Orla Plant will provide needed incremental processing capacity and enhanced netbacks to producers through improved connectivity to the best NGL and residue gas takeaway options out of the basin. Once the Orla plant is placed into service, the Joint Venture’s asset footprint will include over 200,000 acres of dedication, 285 MMcf/d of processing capacity, 300 MMcf/d of gathering capacity, and over 360 miles of pipe.
About First Reserve
First Reserve is a leading global private equity investment firm exclusively focused on energy. With nearly 35 years of industry insight, investment expertise and operational excellence, the Firm has cultivated an enduring network of global relationships and raised approximately USD $31 billion of aggregate capital since inception. First Reserve has completed over 600 transactions (including platform investments and add-on acquisitions), creating several notable energy companies throughout the Firm’s history. Its portfolio companies operate on six continents, spanning the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services, and associated infrastructure. Visit us at www.firstreserve.com for more information.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP) is a master limited partnership that owns and operates midstream businesses in multiple unconventional shale resource plays across the United States. Crestwood Equity is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; storage, transportation, terminalling, and marketing of NGLs; and gathering, storage, terminalling and marketing of crude oil.