Texas-based Genesis Energy has agreed to sell its midstream assets in the Powder River Basin in the US to an affiliate of Silver Creek Midstream for about $300m in an all-cash deal.


Image: Silver Creek Midstream to acquire Powder River Basin midstream assets of Genesis Energy. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.

The midstream assets included in the deal are the Powder River Basin Pipeline and the associated crude oil gathering system and rail facility.

The Powder River Basin Pipeline is made up of nearly 225km of transmission pipeline spread across the Campbell, Converse, Niobrara and Platte Counties in Wyoming.

Owned and operated by Genesis Energy subsidiaries, the pipeline offers producers in the Powder River basin access to multiple markets. These include additional downstream markets at Guernsey, Wyoming, local refineries and/or west, east and gulf coast markets through the Pronghorn Rail loading terminal which is directly linked to the Union Pacific and BNSF railroads.

The Genesis Energy subsidiaries also own more than 482km of low-pressure crude oil gathering pipelines across Converse and Niobrara Counties along with four truck and storage terminals near Wright, Bill, Douglas and Guernsey in Wyoming, with more than 800,000 barrels of storage capacity presently in service or under construction.

The transaction is anticipated to be completed in the third quarter of 2018 and will be based on meeting of customary closing conditions, including receipt of regulatory approvals.

Headquartered in Houston, Genesis Energy calls itself to be a diversified midstream energy master limited partnership. Its operations include offshore pipeline transportation, onshore facilities and pipeline transportation, marine transportation, and sodium minerals and sulfur services.

Last year, the company acquired the alkali chemicals business of US mining and chemical company Tronox for $1.32bn.

On the other hand, the buyer of Genesis Energy’s Powder River Basin midstream assets – Silver Creek Midstream had recently secured an additional $150m equity commitment from Tailwater Capital. The company has plans to use the new equity to continue the build-out of its 100%-owned crude gathering system in the Powder River Basin.