Altus Midstream Company has announced that its subsidiary, Altus Midstream Processing LP, has exercised and closed its option to acquire an approximate 26.7% equity interest in the Permian Highway Pipeline (PHP).
“We are very excited to participate in the Permian Highway Pipeline,” said Clay Bretches, Altus Midstream Chief Executive Officer and president. “This is a high-quality project supported by take-or-pay contracts with creditworthy counterparties.
“Our recent preferred equity financing and revolver amendment facilitate our ability to move forward with the early exercise of PHP. Net to Altus’ ownership interest, the exercise price of the option is approximately US$161 million. This amount includes Altus’ proportional share of capital spent by its JV partners prior to the option exercise and a financing charge associated with the cost of this capital spent prior to Altus’ option exercise. Exercising the PHP option in advance of the September deadline minimizes this financing charge, which reduces our capital requirements by approximately US$8 million relative to what was included in our 2019 guidance.”
PHP is an estimated US$2.1 billion long-haul pipeline that is expected to have approximately 2.1 billion ft3/d of natural gas transportation capacity from the Waha area in northern Pecos County, Texas, to the Katy, Texas area, with connections to Texas Gulf Coast and other markets. The final investment decision to proceed with the project was made in September 2018, and the initial capacity of the pipeline is fully subscribed under long-term binding agreements. PHP is expected to enter service in October 2020 and is approximately 26.7% owned by each of Altus Midstream Processing, Kinder Morgan and EagleClaw Midstream Ventures with the remaining 20% owned by an anchor shipper affiliate.
Read the article online at: https://www.worldpipelines.com/business-news/31052019/altus-midstream-acquires-27-of-permian-highway-pipeline/