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Summit Midstream to Expand Bakken Gathering System

Summit Midstream Partners LLC plans to significantly expand its crude oil and water gathering system in North Dakota's Williams and Divide counties in the Bakken Shale, the Dallas-based partnership said.

The Divide gathering system, which is currently under construction in northwestern North Dakota, was originally planned to be about 90 miles of crude oil gathering pipeline. Summit now plans to construct an additional 145 miles of gathering pipeline, capable of handling up to 45,000 b/d of crude oil and 45,000 b/d of water.

"The expansion is supported by the recent execution of a new, 10-year, fee-based crude oil and water gathering agreement covering 250,000 dedicated acres with a leading independent producer in the Bakken Shale play," the company said. "The total capital expenditures for the expansion are approximately $60 million and will add to the approximately $200 million of expansion capital being spent by Summit Investments in 2013." The expansion is expected to be put in service in phases between 4Q2013 and 1Q2014.

Privately held Summit Midstream Partners LLC owns and controls the general partner of Summit Midstream Partners LP (SMLP), with 71.6% limited partner interest.

Summit expects "to continue to expand our gathering system with other producers that are active in the area," said CEO Steve Newby "This development will add additional scale to our already large inventory of future drop down opportunities for SMLP."

Earlier this month SMLP said it would buy two gas gathering systems -- one in the Bakken and the other in the Marcellus -- in combined deals worth a $460 million (see Shale Daily, June 6). SMLP closed and funded a $250 million dropdown acquisition of Bakken-focused Bison Midstream LLC from Summit Investments. Bison gathers associated gas in Mountrail and Burke counties in North Dakota and consists of 300 miles of low- and high-pressure gathering pipelines and six compressor stations with 5,950 hp. Capacity is being expanded from 20 MMcf/d to 30 MMcf/d with additional compression, which is expected to be completed by the end of 2013.

Early this year, unit Summit Investments agreed to pay $513 million to acquire midstreamer Bear Tracker Energy LLC, which is focused on North Dakota and Colorado (see Shale Daily, Jan. 11).

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