Crude oil logistics provider Lotus Midstream, LLC has announced it has entered into a definitive agreement to acquire the Centurion pipeline system and a southeast New Mexico crude oil gathering system from Occidental Petroleum Corporation. The transaction is expected to close later in 3Q18, subject to customary closing conditions.
The Centurion pipeline system is a large-scale, integrated network of approximately 3000 miles of crude oil gathering and transportation pipelines that extend from southeast New Mexico across the Permian Basin of West Texas to Cushing, Oklahoma. Integrated assets also include two crude oil storage terminals strategically located in the Midland, Texas, and Cushing, Oklahoma market centres with a combined storage capacity of approximately 7 million bbls and more than 125 truck stations. The system is designed to connect the nation’s premier supply basin to key market centres.
The southeast New Mexico gathering system includes more than 50 miles of crude oil gathering pipelines with connections to the Centurion pipeline system and a third-party intrabasin system and related infrastructure.
The acquisition is supported by long-term revenue commitments from multiple customers and a long-term acreage dedication from Occidental.
“Lotus is very excited about this acquisition,” said Lotus CEO Mike Prince. “Centurion is a terrific network of connected assets that serve the Permian, the most prolific basin in North America. In addition, it is staffed with experienced, knowledgeable people throughout the organisation. We look forward to partnering with them to expand the existing footprint by providing outstanding customer service to both current and new customers.”
EnCap Flatrock Midstream sponsored Lotus with an initial capital commitment of US$400 million in February 2018 and will provide additional financial support for the acquisition.
“The Lotus team has a long and significant history of success across the midstream value chain, with a focus on strategic platforms with strong growth potential,” said EnCap Flatrock Midstream Managing Partner Greg King, who is also a member of the Lotus board of directors. “We are excited about this acquisition and look forward to assisting the Lotus team as it expands the system’s customer base and grows system volumes.”
Paul Hastings LLP served as legal adviser to Lotus with partner Jimmy Vallee in the lead role from the firm’s Houston office. Barclays Capital Inc., acted as financial adviser.
Read the article online at: https://www.worldpipelines.com/business-news/09082018/lotus-midstream-to-acquire-centurion-pipeline-system/