Summit Midstream Partners LLC is acquiring midstream gas assets in the Piceance Basin from Encana Oil & Gas (USA) Inc. for $590 million, the company said Tuesday.
The assets include about 260 miles of pipeline and 90,000 hp of compression facilities and serve Mamm Creek, Orchard and South Parachute production in the area around Rifle, CO. They are currently transporting about 500 MMcf/d of gas under long-term contracts with multiple producers, according to Summit.
“In addition to the physical assets, Summit will also add a team of veteran midstream operators with extensive Rockies experience,” said Summit CEO Steve Newby.
Dallas-based Summit, which is privately held, has also committed to build for Encana the midstream infrastructure necessary to support its emerging Niobrara development.
The sale of the Piceance Basin assets is subject to regulatory approvals and closing conditions and is expected to close during the current quarter.
Summit’s operations include gathering, compression and dehydration assets in the core of the Barnett and Marcellus shales supporting some of the largest production companies in North America, according to the company’s website.
Encana Oil & Gas parent Encana Corp. has been selling midstream assets to focus on exploration and production. It was recently announced that Enbridge Inc. had agreed to become majority owner of the Cabin Gas Plant development in the Horn River Basin of British Columbia after making a C$220 million deal with Encana Corp., which operates the development with a 52% stake (see Daily GPI, Oct. 10).
“This sale is another example of Encana redirecting midstream capital into our higher-return core business of growing natural gas and liquids production,” Encana’s Renee Zemljak, executive vice president of midstream, marketing and fundamentals, said of the Cabin deal.
©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |