First Reserve, Crestwood JV Plans Pipeline Construction Project
Crestwood Equity Partners LP and First Reserve today announced that Crestwood Permian Basin Holdings LLC, a joint venture focused on developing, owning and operating midstream infrastructure in the Delaware Basin, has agreed to acquire Crestwood’s Willow Lake gathering and processing assets located in Eddy County, New Mexico. The companies also announced that the joint venture has approved the construction of a 200 million cubic feet per day cryogenic gas processing plant located near Orla, TX and associated pipeline infrastructure required to connect the Willow Lake system to the plant.
“The announced Orla processing plant and the contribution of Willow Lake to our Permian joint venture with First Reserve is an important step in Crestwood’s strategy of expanding and integrating our Delaware Basin footprint to create a super system that spans over two million acres located in the heart of the most active development counties in the Delaware Basin,” said Robert G. Phillips, Chairman, President and Chief Executive Officer of Crestwood’s general partner. “Dropping the Willow Lake assets into our joint venture is consistent with our strategy of prudently pursuing organic growth opportunities while managing risk and maintaining balance sheet strength. As we continue to build out a large integrated platform in the Delaware Basin, Crestwood and First Reserve are aggressively evaluating new organic expansion opportunities for existing and new customers that will further expand our Permian presence and drive meaningful cash flow growth beginning in 2018.”
The initial project scope will include the Orla Express Pipeline, a 33 mile, 20-inch high pressure line connecting the existing Willow Lake gathering system in Eddy County, NM to the Orla plant. The Orla plant will provide full liquids handling and multiple residue and NGL interconnects. Initial project capital is projected to be approximately $170 million with an in-service date in the second half of 2018.
Upon completion of the project, the joint venture’s integrated gathering and processing footprint will span more than 100 miles and service customers across Eddy and Lea counties, NM and Loving, Ward, Reeves and Culberson counties, TX.
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