EagleClaw Midstream, Blackstone Energy Partners funds and I Squared Capital said Friday they are throwing in to help fund more Permian Basin oil and natural gas takeaway, including the Permian Highway Pipeline (PHP), a 2 Bcf/d system that would move supplies to the Texas coast, with connections to Mexico markets.
Under terms of the agreement, I Squared committed more than $500 million and its Permian Delaware midstream company, Pinnacle Midstream, to partner in BCP Raptor Holdco, EagleClaw’s parent company. In addition, EagleClaw has completed its previously announced acquisition of Caprock Midstream.
I Squared’s investment, additional funding by Blackstone and EagleClaw management, would be used to expand EagleClaw’s system, the Pinnacle acquisition and ongoing construction of PHP.
The 430-mile, 42-inch diameter PHP system was given the all-clear sign in September to move forward by EagleClaw and its 50-50 joint partner Kinder Morgan Texas Pipeline LLC. The pipeline could be in service by late 2020.
“The acquisition of Pinnacle, coming on the heels of our recent announcements of the acquisition of Caprock and our partnership on the Permian Highway Pipeline, is another exciting chapter in the continued growth story of EagleClaw,” EagleClaw CEO Bob Milam said. “This transaction expands our business in every aspect, from asset footprint to customer diversity, while remaining true to EagleClaw’s core mission of providing best-in-class midstream service to Delaware Basin producers.”
Pro forma for the acquisitions, EagleClaw would operate nearly 1,000 miles of natural gas, natural gas liquids, crude and water gathering pipelines. It also would manage more than 1.4 Bcf/d of processing capacity as well as crude and water storage and disposal facilities.
EagleClaw now has nearly 500,000 acres in the core of the southern Delaware sub-basin of the Permian under long-term dedication for midstream services.
The Pinnacle purchase would give EagleClaw about 100 miles of gas and crude gathering pipeline, 30,000 bbl of crude storage facilities and a 60 MMcf/d gas processing facility. Pinnacle’s assets, in close proximity to EagleClaw’s existing assets, serve producers that have committed 35,000 acres for long-term dedication of midstream services. All of Pinnacle’s field personnel are being offered opportunities to remain with the company.
“We are excited to partner with Blackstone to invest in essential midstream infrastructure transporting critical resources from the Permian Basin,” I Squared partner Adil Rahmathulla said. “We share EagleClaw management’s long-term strategic vision and are committed to supporting EagleClaw’s continued success and position as the largest pure-play privately held Delaware Basin midstream business.”
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