Salt Creek Midstream LLC, a portfolio company owned by funds managed by the Private Equity Group of Ares Management LP and by ARM Energy Holdings LLC Oct. 3 announced that it has entered into a letter of intent with Noble Midstream Partners LP to form a 50:50 partnership on a crude oil pipeline and gathering system in the Delaware Basin.
At closing, the project will be underpinned by approximately 180,000 dedicated acreage contributions from Noble Midstream and Salt Creek and five other Southern Delaware Basin producers, with a line of sight to additional dedications totaling approximately 100,000 acres. This includes partial dedication of Noble Energy’s Reeves County position totaling approximately 70,000 acres. The project footprint will be served by a combination of nearly 100 miles of pipeline in Pecos, Reeves, Ward and Winkler Counties, in-field crude gathering lines and a trunkline to Wink Hub that will provide critical downstream connectivity for producers in the Southern Delaware Basin.
Salt Creek CEO Zach Lee said, “Salt Creek is achieving great momentum over an incredibly rapid timeframe with our multiple developments spanning the Permian Basin. We are excited to be working in partnership with the Noble Midstream team in the Southern Reeves area. 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.”
“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.” stated Terry R. Gerhart, CEO of Noble Midstream. “The pipeline system will provide critical downstream connectivity and enhanced market optionality for producers in the Southern Delaware Basin.”
Salt Creek has commenced construction of the pipeline, with an expected operational date in second-quarter 2019. The project provides access to 200,000 barrels of new crude oil storage with expansion potential to 300,000 barrels. The project’s development is supported by an average customer acreage dedication term of approximately 15 years.
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