CorEnergy Infrastructure Trust has acquired Crimson Midstream, a crude oil pipeline owner and operator in California, US, for about $350m.

The deal includes four infrastructure pipeline systems with a combined length of nearly 2,896km in California.

The four pipeline systems are spread across northern, central, and southern California, and connect California crude production to in-state refineries.

Through the deal, CorEnergy gains ownership of six pipeline systems in three markets serving diversified shippers.

The company said that the acquisition boosts its regulated contractual revenue sources. The real estate investment trust said that the asset base and operating expertise of Crimson Midstream provide greater potential for making strategic acquisitions in the future.

CorEnergy chairman, CEO and president Dave Schulte said: “The acquisition of Crimson diversifies CORR’s critical infrastructure portfolio with four new pipeline networks and positions CorEnergy as an owner/operator of utility-like assets in line with expectations for our industry leading REIT qualifying platform.”

As per the terms of the deal, Crimson Midstream will be paid $75.6m in cash, $105m in new term loan and revolver borrowings, and $119.4m worth shares in CorEnergy.

Additionally, CorEnergy will contribute the Grand Isle Gathering System (GIGS) to the sellers, as part of the deal.

The Grand Isle Gathering System was acquired by CorEnergy for $245m in 2015 from Energy XXI USA. The asset is a 246km long subsea pipeline system with related onshore facilities, which serves oil-producing fields in the shallow part of the Gulf of Mexico.

Crimson Midstream founder and board chairman John Grier said: “Our combined ability to pursue additional opportunities leveraging Crimson’s oil market relationships, together with CorEnergy’s natural gas transmission assets, establishes a diversified foundation for future acquisition consideration.

“The Crimson pipeline networks connect multi-billion dollar refining complexes to low declining fields, producing desirable native grades of California crude oil, which is required for blended energy products satisfying state environmental standards.”