Noble Midstream and Greenfield Midstream Exercise Saddlehorn Option
Noble Midstream Partners LP (Noble Midstream) and Greenfield Midstream LLC (Greenfield Midstream) have acquired a 20% interest in the Saddlehorn Pipeline through their Black Diamond Gathering LLC (Black Diamond) joint venture.
The Saddlehorn Pipeline, which is jointly owned by affiliates of Magellan Midstream Partners, LP (Magellan), Plains All American Pipeline, LP (Plains) and Western Midstream Partners, LP (WES), is currently capable of transporting approximately 190,000 barrels per day (Bbl/d) of crude oil and condensate from the DJ and Powder River Basins to storage facilities in Cushing, OK.
Magellan serves as operator of the Saddlehorn pipeline.
Following a successful open season, the Saddlehorn Pipeline is expanding by 100,000 Bbl/d, to a new total capacity of 290,000 Bbl/d. The incremental capacity is expected to be available in late 2020 following the addition of incremental pumping and storage capabilities. There will be no additional capital required by Black Diamond for the expansion of the pipeline to 290,000 Bbl/d.
Noble Midstream operates Black Diamond, which includes a large-scale integrated crude oil gathering system in the DJ Basin, consisting of approximately 240 miles of pipeline in operation, 300,000 Bbl/d delivery capacity and 390,000 Bbl/d crude oil storage capacity.
The system is connected to every major takeaway pipeline in the DJ Basin, including the White Cliffs Pipeline, the Saddlehorn Pipeline, the Grand Mesa Pipeline, and the Pony Express Pipeline.
Noble Midstream expects to pay for its share of the acquisition through cash on hand.
The effective date of the transaction was February 1, 2020; Noble Midstream 2020 guidance included the Saddlehorn acquisition and remains unchanged.
Noble Midstream President and Chief Operating Officer Robin Fielder said, “This accretive transaction represents a rare opportunity to buy into a largely-contracted pipeline with high-quality producers and midstream operators.”
Greenfield Midstream owns 45.6% of Black Diamond.
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