Plains to acquire 55% interest in EPIC Crude Holdings, LP
Published by Elizabeth Corner,
Senior Editor
World Pipelines,
Plains All American Pipeline, L.P. and Plains GP Holdings announced today that a wholly owned subsidiary has entered into a definitive agreement to acquire from subsidiaries of Diamondback Energy, Inc. and Kinetik Holdings Inc., a 55% non-operated interest in EPIC Crude Holdings, LP, the entity that owns and operates the EPIC Crude Oil Pipeline, in a transaction valued at approximately US$1.57 billion, inclusive of approximately US$600 million of debt.
Additionally, Plains has agreed to a potential US$193 million earnout payment should an expansion of the pipeline to a capacity of at least 900 000 bpd be formally sanctioned before year-end 2027. The transaction is expected to be immediately accretive to distributable cash flow with synergistic opportunities expected to result in mid-teens unlevered returns. The remaining 45% interest in EPIC Crude Holdings is owned by a portfolio company of Ares Management Corporation, which also serves as operator.
The EPIC Pipeline provides long-haul crude oil takeaway from the Permian and Eagle Ford basins to the Gulf Coast market at Corpus Christi. EPIC
Crude Holdings’ assets include:
- Approximately 800 miles of long-haul pipelines, including the EPIC Pipeline.
- Operating capacity of over 600 000 bpd with low-cost expansion capabilities.
- Approximately 7 million bbls of operational storage.v
- Over 200 000 bpd of export capacity.
“We are excited to work with the EPIC Management team. This transaction strengthens our position as the premier crude oil midstream provider, complements our asset footprint and enhances our customer offering. The combination of our stake in EPIC Crude Holdings coupled with our existing integrated Permian and Eagle Ford assets enhances our commitment to offering a high level of connectivity and flexibility for our customers. By further linking our Permian and Eagle Ford gathering systems to Corpus Christi, we are enhancing market access and ensuring our customers have reliable, cost-effective routes to multiple demand centres,” said Willie Chiang, Chairman, CEO and President.
“The combined assets will allow us to capture synergies through additional service offerings, and drive value via expanded scale and integration. Our financial flexibility enables us to finance the acquisition utilising our balance sheet, while maintaining a pro-forma leverage ratio within our established leverage target range. Ultimately, our interest in EPIC Crude Holdings will not only benefit Plains and our partners but also our unit holders by creating further return of capital opportunities.”
The transaction is expected to be completed by early 2026.
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Read the article online at: https://www.worldpipelines.com/business-news/02092025/plains-to-acquire-55-interest-in-epic-crude-holdings-lp/
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