Crude oil logistics provider Lotus Midstream has signed an agreement to acquire the Centurion pipeline system and a Southeast New Mexico crude oil gathering system from Occidental Petroleum.
Image: Lotus Midstream intends to acquire midstream assets. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.
The Centurion pipeline system is an integrated network of approximately 4,828km of crude oil gathering and transportation pipelines which extends from southeast New Mexico across the Permian Basin of West Texas to Cushing, Oklahoma.
Designed to connect the nation’s premier supply basin to key market centers, the pipeline system also has integrated assets including two crude oil storage terminals located in the Midland, Texas, and Cushing, Oklahoma market centers.
The terminals have a combined storage capacity of approximately seven million barrels and more than 125 truck stations.
Lotus Midstream will acquire the Southeast New Mexico gathering system which includes more than 80km of crude oil gathering pipelines with connections to the Centurion pipeline system and a third-party intrabasin system and related infrastructure.
Lotus Midstream CEO Mike Prince said: “Centurion is a terrific network of connected assets that serve the Permian, the most prolific basin in North America. In addition, it is staffed with experienced, knowledgeable people throughout the organization.
“We look forward to partnering with them to expand the existing footprint by providing outstanding customer service to both current and new customers.”
Planned to be closed in the third quarter of 2018, the transaction is subject to customary closing conditions. Financial terms of the deal were undisclosed.
Earlier this year, Lotus Midstream secured $400m in initial capital commitment from EnCap Flatrock Midstream.
EnCap now plans to provide additional financial support to Lotus Midstream for the acquisition of the midstream assets.
EnCap Flatrock Midstream managing partner Greg King said: “The Lotus team has a long and significant history of success across the midstream value chain, with a focus on strategic platforms with strong growth potential.
“We are excited about this acquisition and look forward to assisting the Lotus team as it expands the system’s customer base and grows system volumes.”