Salt Creek Midstream to Partner with Noble Midstream on Crude Oil Pipeline and Gathering System in the Delaware Basin
Salt Creek Midstream, LLC (“Salt Creek”), a portfolio company owned by
funds managed by the Private Equity Group of Ares Management, L.P.
(“Ares”) and by ARM Energy Holdings, LLC (“ARM Energy”), today announced
that it has entered into a letter of intent with Noble Midstream
Partners LP (“Noble Midstream”) to form a 50/50 partnership on a crude
oil pipeline and gathering system in the Delaware Basin.
Salt Creek will partner with Noble Midstream on the construction of a
200,000 bbl/d newbuild pipeline system in the Delaware Basin. The
95-mile, 20-inch diameter pipeline system will originate in Pecos
County, Texas, with additional connections in Reeves County and Winkler
County, Texas; providing shippers with access to multiple downstream
outlets. Salt Creek and Noble Midstream anticipate the execution of
definitive agreements and closing of the transaction to occur in the
fourth quarter of 2018.
At closing, the project will be underpinned by approximately 180,000
dedicated acreage contributions from Noble Midstream and Salt Creek and
five other Southern Delaware Basin producers, with a line of sight to
additional dedications totaling approximately 100,000 acres. This
includes partial dedication of Noble Energy’s Reeves County position
totaling approximately 70,000 acres. The project footprint will be
served by a combination of nearly 100 miles of pipeline in Pecos,
Reeves, Ward and Winkler Counties, in-field crude gathering lines and a
trunkline to Wink Hub that will provide critical downstream connectivity
for producers in the Southern Delaware Basin.
Salt Creek CEO Zach Lee said, “Salt Creek is achieving great momentum
over an incredibly rapid timeframe with our multiple developments
spanning the Permian Basin. We are excited to be working in partnership
with the Noble Midstream team in the Southern Reeves area. We have known
and respected the Noble Midstream team for some time and look forward to
building a world class crude oil business with them in the Delaware
Basin.”
“We are excited to partner with Salt Creek on the formation of this
joint venture and look forward to bringing both our commercial and
operations expertise to the table.” stated Terry R. Gerhart, Chief
Executive Officer of Noble Midstream. “The pipeline system will provide
critical downstream connectivity and enhanced market optionality for
producers in the Southern Delaware Basin.”
Salt Creek has commenced construction of the pipeline, with an expected
operational date in the second quarter of 2019. The project provides
access to 200,000 barrels of new crude oil storage with expansion
potential to 300,000 barrels. The project’s development is supported by
an average customer acreage dedication term of approximately 15 years.
About Salt Creek Midstream, LLC
Formed in 2017, Houston-headquartered Salt Creek Midstream, LLC is a
joint venture of ARM Energy Holdings, LLC and funds managed by the
Private Equity Group of Ares. Salt Creek is a full service midstream
provider in the Delaware Basin, offering gas and crude gathering,
compression, cryogenic processing and treating services, as well as
water gathering and disposal services. Salt Creek currently spans over
350,000 acres in gas dedications and approximately 300,000 acres in
crude across Culberson, Reeves, Ward, Winkler, Lea, Pecos, and Eddy
Counties within the Delaware Basin.
About Noble Midstream
Noble Midstream is a growth-oriented master limited partnership formed
by Noble Energy, to own, operate, develop and acquire domestic midstream
infrastructure assets. Noble Midstream currently provides crude oil,
natural gas, and water-related midstream services in the DJ Basin in
Colorado and the Delaware Basin in Texas. For more information, please
visit www.nblmidstream.com.
About Ares Management, L.P.
Ares Management, L.P. is a publicly traded, leading global alternative
asset manager with approximately $121.4 billion of assets under
management as of June 30, 2018 and 18 offices in the United States,
Europe, Asia and Australia. Since its inception in 1997, Ares has
adhered to a disciplined investment philosophy that focuses on
delivering strong risk-adjusted investment returns throughout market
cycles. Ares believes each of its three distinct but complementary
investment groups in Credit, Private Equity and Real Estate is a market
leader based on assets under management and investment performance. Ares
was built upon the fundamental principle that each group benefits from
being part of the greater whole. For more information, visit www.aresmgmt.com.
About ARM Energy Holdings, LLC
Headquartered in Houston, with offices in Calgary, Denver, Midland, and
Pittsburgh, ARM Energy Holdings, LLC is a premier producer services
firm, active in every sector of the energy value chain across all major
North American oil and gas basins. Its integrated, diversified portfolio
includes Asset Risk Management, LLC, providing risk management and
hedging strategies for producers; ARM Energy Management LLC, providing
physical oil and gas marketing, transportation and asset management
services and trading; and ARM Midstream, LLC, providing midstream
investment, infrastructure development and operations. For more
information, please visit www.armenergy.com.
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