EPIC Midstream Holdings, LP announced yesterday that the EPIC Crude Oil Pipeline has successfully closed its first open season on 26 July 2018 and has executed definitive agreements to add Diamondback Energy as a strategic partner and signed other new primary shippers. Diamondback will have 50 000 bpd of oil of capacity on the EPIC Crude Oil Pipeline.
As a strategic partner, Diamondback, via its subsidiary Rattler Midstream LLC, will also have an option to acquire up to 5% of the equity in the EPIC Crude Oil Pipeline, with the option expiring in the first quarter of 2019. Other newly signed primary shippers have secured 200 000 bpd of capacity, which include minimum volume commitments of 150 000 bpd on the EPIC Crude Oil Pipeline and will also be delivering Eagle Ford volumes to the pipeline at EPIC’s Gardendale, Texas terminal.
With these commitments, shippers have secured 425 000 bpd of capacity originating from the Permian Basin on the EPIC Crude Oil Pipeline, and given strong commercial interest, EPIC is commencing its second open season on 1 August 2018. Based upon the results of the second open season, EPIC will consider upsizing from a 24 in. line to a 30 in. line, expanding its Permian Basin capacity.
As previously announced, Apache Corporation and Noble Energy have committed to anchor the EPIC Crude Oil Pipeline for 75 000 bpd and 100 000 bpd of capacity, respectively. At least 10% of system capacity will be reserved for uncommitted shippers.
“Diamondback’s transportation on and equity option in the EPIC Crude Oil Pipeline are important steps as we make progress on our broader long-term takeaway strategy,” stated Travis Stice, Chief Executive Officer of Diamondback. “Our agreements secure a firm solution for a majority of our Midland Basin barrels and we are excited to be aligned with some of the Permian’s largest producers on this project.”
“EPIC continues to add value to our pipeline with the addition of Diamondback as a strategic partner and our new primary shippers,” said Phillip Mezey, Chief Executive Officer of EPIC. “We are pleased to work with our customers and producers to ensure takeaway capacity from both the Permian Basin and Eagle Ford as volumes rapidly grow.”
“We are excited to add new partners to the project,” said Nate Walton, Partner and Co-Head of North American Private Equity at Ares Management, L.P. “The EPIC Crude Oil Pipeline is a demonstration of the alignment of interests with our customers as we expect up to 50% of the pipeline to be owned by our strategic partners, which are some of the largest operators in the Permian Basin.”
The EPIC Crude Oil Pipeline, which will run side-by-side with the EPIC NGL Pipeline, will extend from Orla, Texas to the Port of Corpus Christi, Texas and includes terminals in Orla, Pecos, Saragosa, Crane, Wink, Midland, Helena and Gardendale, with Port of Corpus Christi connectivity and export access. It will service the Delaware, Midland and Eagle Ford Basins. The crude system is expected to be in service in the fourth quarter of 2019. The EPIC Pipelines are backed by capital commitments from funds managed by the Private Equity Group of Ares.
Read the article online at: https://www.worldpipelines.com/business-news/27072018/epic-pipeline-completes-first-open-season/
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