Noble, Apache, Diamondback Affiliates Buy Stakes in EPIC Pipelines

EPIC Midstream announced Monday that Noble Midstream Partners exercised its option for a 30% equity stake in the EPIC Crude Pipeline Project and a 15% equity stake in the EPIC NGL Pipeline.  Also Monday, EPIC said an Altus Midstream subsidiary and Diamondback Energy's Rattler Midstream subsidiary exercised options for 15% and 10%, respectively, in the EPIC Crude Pipeline Project.

“The strategic value of these projects to our shippers is clear through the exercising of the options by our partners,” said Phillip Mezey, CEO of EPIC. “Both projects remain on schedule and are critical to the continued development of the Permian Basin and Eagle Ford Shale.”

EPIC was formed in 2017 to build, own and operate midstream infrastructure in both the Permian and Eagle Ford Basins. Its first two projects, the EPIC Crude Oil Pipeline and the EPIC NGL Pipeline, will transport crude and NGL across Texas for delivery into the Corpus Christi market. The projects are backed by private equity funds managed by Ares Management.

The transactions are expected to close by the end of this month, the companies said.

Noble Midstream said its total cash equity investment is expected to be in the range of $165 million to $180 million for the EPIC Y-Grade Pipeline and $330 million to $350 million for the EPIC Crude Oil Pipeline.

Terry R. Gerhart, CEO of the general partner of Noble Midstream, said its participation in the EPIC projects will allow it to capitalize on the "growing demand for crude oil and NGL takeaway and export capability from the Permian Basin.

"These additions are complementary to our existing portfolio, enhance our customer diversification, and will add a stable and high-quality source of cash flow from a premier U.S. unconventional basin, Gerhart said."

About the Projects

The 24-inch EPIC Y-Grade Pipeline is a 700-mile pipeline linking NGL reserves in the Permian and Eagle Ford to Gulf Coast refiners, petrochemical companies, and export markets. The pipeline will have a throughput capacity of approximately 440 MBbl/d with multiple origin points. The project scope includes approximately 180 MBbl/d of initial fractionation capacity, scalable to provide maximum flexibility, as well as associated purity product take-away in Corpus Christi, Texas. Construction of the third and final phase of the EPIC Y-Grade Pipeline from Benedum Plant to Robstown, Texas, is approximately 60% complete.

(source: EPIC)

The 30-inch EPIC Crude Oil Pipeline has a current capacity of 590 MBbl/d from the Delaware Basin to the Gulf Coast. With the installation of additional pumps and storage, EPIC can increase the 30-inch capacity to approximately 900 MBbl/d. Construction of the 30” pipeline is expected to commence in February, and significant construction synergies between the Crude and Y-Grade pipelines are anticipated.

Because of high customer demand for crude oil transportation, EPIC announced in October 2018 the decision to utilize the third and final phase of its EPIC Y-Grade Pipeline from Crane, Texas to Corpus Christi for crude oil service while the EPIC Crude Oil Pipeline and EPIC NGL fractionator remains under construction. Interim service remains on track for startup in the third quarter of 2019. The EPIC Y-Grade Pipeline will convert back to NGL service at completion of the EPIC Crude Oil Pipeline in January of 2020.

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