Noble Midstream Partners LP is teaming up with Salt Creek Midstream LLC to build an expandable 200,000 b/d crude oil pipeline system in West Texas within the Permian Basin’s Delaware formation.

The 95-mile, 20-inch diameter system, with potential to expand to 300,000 b/d of capacity, would originate in Pecos County, with additional connections in Reeves and Winkler counties. The project would be underpinned with 180,000 dedicated acres from the 50-50 partners, each based in Houston, and five other Delaware producers.

“We are excited to partner with Salt Creek on the formation of this joint venture and look forward to bringing both our commercial and operations expertise to the table.” said Noble Midstream CEO Terry R. Gerhart. “The pipeline system will provide critical downstream connectivity and enhanced market optionality for producers in the Southern Delaware Basin.”

Producers dedicating acreage include Noble Energy Inc., which launched Noble Midstream as an initial public offering (IPO) in 2016. Noble Energy has a deep portfolio in the Permian, including 70,000 acres alone in Reeves County. The midstream partners also have “a line of sight” for another 100,000 dedicated acres.

Once underway, the project would be underpinned by around 180,000 dedicated acres and nearly 100 miles of pipeline in Pecos, Reeves, Ward and Winkler counties. The dedication includes an in-basin oil transportation dedication of the southern portion of Noble Energy’s Reeves County position totaling about 70,000 acres.

Noble Midstream would continue to provide oil gathering services for Noble Energy’s Permian development in the Blanco River DevCo, and the northern Reeves County acreage position remains dedicated to the Advantage Pipeline system for in-basin oil transportation through the Trinity River DevCo.

“Since our IPO, we have continued to expand our Permian service offerings beyond infield gathering and have materially enhanced our third-party platform,” said Gerhart. “These opportunities build on our strategy,” providing the company “additional pathways” to reach a stated goal to hit 50% net gross earnings contributions from the Permian by the end of 2020.

The five-year net capital investment for Noble Midstream is estimated at $60-80 million, supported by an average customer acreage dedication term of about 15 years.

Noble Midstream and private equity-backed Salt Creek, a portfolio company of Ares Management LP and ARM Energy Holdings LLC, expect to complete definitive agreements for the 50-50 venture by the end of the year.

Salt Creek has begun constructing the pipeline, with an expected operational date before mid-2019.

“Salt Creek is achieving great momentum over an incredibly rapid timeframe with our multiple developments spanning the Permian Basin,” said CEO Zach Lee. “We have known and respected the Noble Midstream team for some time and look forward to building a world class crude oil business with them in the Delaware Basin.”

Formed earlier this year, Salt Creek currently has more than 350,000 acres in natural gas dedications and about 300,000 acres in crude in the Delaware within the West Texas counties of Culberson, Reeves, Ward, Winkler and Pecos, as well as New Mexico’s Lea and Eddy counties.

An Apache Corp. subsidiary and Salt Creek in May agreed to develop a 445,000 b/d natural gas liquids header system to serve growing production in from the Alpine High project in the Delaware.

In related news, Noble Midstream said it started gathering oil in September from an initial well for a third-party Delaware producer. The customer development plan spans close to 13,000 dedicated acres in Reeves County, with additional activity on the acreage anticipated in 2019. Oil, gas and produced water gathering services are being provided through the Blanco River development company.