Crestwood, First Reserve JV Completes Acquisition of Willow Lake Gathering and Processing Assets
Crestwood Equity and First Reserve announced their 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, NM. The Crestwood Permian Joint Venture now owns all of Crestwood’s Delaware Basin assets.
The joint venture will build a 200 MMcf/d cryogenic gas processing plant located in Reeves County, TX and related infrastructure required to connect the Willow Lake system to the and multiple third-party pipelines. Crestwood contributed its Willow Lake gathering and processing assets to the joint venture at a value of $151 million.
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 dedications from existing Willow Lake customers and is 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, TX.
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 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.
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