Crestwood Midstream Partners LP has signed an agreement to acquire midstream assets in the Fayetteville Shale and the Granite Wash plays from Frontier Gas Services, LLC, headquartered in Tulsa, for $338 million, with an additional $15 million to be paid to Frontier if certain operational objectives are met within six months of the closing date.
The Frontier Fayetteville assets consist of 127 miles of high pressure and low pressure gathering pipelines with capacity of 510 MMcf/d, treating capacity of approximately 165 MMcf/d and 35,000 hp of compression. The Fayetteville systems interconnect with multiple interstate pipelines which serve the Fayetteville Shale and are supported by long-term, fixed-fee contracts with producers who have dedicated 100,000 acres in the core of the Fayetteville Shale to Frontier.
The Frontier Granite Wash assets include a 28-mile pipeline system and a 36 MMcf/d cryogenic processing plant in the Texas Panhandle. Crestwood LP plans to install a second processing plant with 60 MMcf/d of capacity by the end of 2011 to provide additional capacity to support growth in volumes from this region.