Plains All American, Oryx Midstream Form Permian Basin Joint Venture
Plains All American and Oryx Midstream Holdings, a portfolio company of Stonepeak Infrastructure Partners, announced they have successfully completed the formation of their Permian Basin strategic joint venture.
Plains Oryx Permian Basin (the joint venture or JV) includes all of Oryx's Permian assets and, except for Plains' long-haul pipeline systems and certain of its intra-basin terminal assets, the vast majority of Plains' assets located within the Permian Basin.
"This is a significant milestone that positions Plains, Oryx and the JV to create significant value for our customers, partners, and investors," said Willie Chiang, Chairman and CEO of Plains All American. "The Plains and Oryx teams have developed a robust integration strategy that prioritizes a seamless transition for customers and positions the JV to capture opportunities as the Permian continues to grow."
"We are confident that this joint venture will provide significant and mutual benefits to all involved by increasing connectivity, enhancing reliability, and strengthening efficiencies across the Permian Basin,” said Brett Wiggs, Chief Executive Officer of Oryx. “We look forward to continuing to work with the Plains team to grow and strengthen the joint venture in the future."
Plains Oryx Permian JV Overview: Strategic Alignment, Multiple Benefits
- Natural combination of two leading Permian franchises, provides JV customers enhanced flexibility, optionality and connectivity
- Highly complementary assets, capabilities, and long-term business models, with direct downstream connections to all major intra-basin and downstream markets
- Enhances shipper diversification, economies of scale and long-term Free Cash Flow
- >4 million dedicated system acres, high-return multi-decade drilling inventory, ~7-year average remaining contract tenor
- Cashless transaction, debt-free entity, durable JV structure that is owned 65% PAA / 35% Oryx (governance consistent with ownership interests)
- Plains serves as operator of the JV, and going forward, the JV's results will be consolidated into Plains' reported results and financial statements
- A Joint Operating Committee that includes representatives from Plains and Oryx will provide oversight on material JV operating and commercial decisions
- Multiple opportunities to drive operating efficiencies; supports reducing environmental footprint, GHG emissions and overall costs of operations
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