Plains All American Pipeline and Plains GP (collectively, “Plains”) have agreed to acquire a 55% non-operated interest in EPIC Crude, the holding company for the EPIC Pipeline in the US, in a deal worth around $1.57bn.
The consideration also includes around $600m in debt.
As part of the deal, subsidiaries of Diamondback Energy and Kinetik will sell their 27.5% equity interests each for roughly $500m in net upfront cash.
The transaction includes a potential $193m earnout payment if an expansion of the pipeline to a capacity of at least 900,000 barrels per day is approved by the end of 2027.
This implies an overall valuation of EPIC Crude at $2.85bn, with an additional $350m contingent on potential expansion approval.
The EPIC Pipeline serves as a crude oil transport route from the Permian and Eagle Ford basins to the Gulf Coast market in Corpus Christi. The infrastructure features approximately 1,287km of long-haul pipelines, with over 600,000 barrels per day in operating capacity.
It also includes around seven million barrels of operational storage and more than 200,000 barrels per day of export capacity.
The remaining 45% interest in EPIC Crude will continue to be owned by a portfolio company of Ares Management, which also serves as the operator.
The acquisition is expected to be immediately accretive to distributable cash flow for Plains and promises synergistic opportunities that could result in mid-teens unlevered returns.
It supports Plains’ Permian wellhead to water strategy by enhancing upstream connectivity and expanding downstream market options. The system is supported by long-term minimum volume commitments from high-quality customers.
Plains aims to finance this acquisition using cash and debt while keeping its leverage ratio within the target range.
Plains chairman, CEO and president Willie Chiang said: “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.”
The deal is anticipated to close by early 2026, subject to customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
