NGL aims to integrate the Hillstone system into its existing Delaware Basin platform to maximise uptime and redundancy for its producer customers
NGL Energy Partners has agreed to acquire Hillstone Environmental Partners from Golden Gate Capital for nearly $600m (£488.34m).
Hillstone provides water pipeline and disposal infrastructure solutions to producers. The company has a core operational focus in the state line area of southern Eddy and Lea Counties, New Mexico and northern Loving County, Texas in the Delaware Basin.
Assets of Hillstone
The US-based company has a fully interconnected produced water pipeline transportation and disposal system consisting of 19 salt water disposal wells, representing nearly 580,000 barrels per day of permitted disposal capacity.
It has a newly-built network of produced water pipelines with approximately 680,000 barrels per day of transportation capacity.
Hillstone claims that it has an additional 22 permits to build another 660,000 barrels per day of disposal capacity.
NGL aims to integrate the Hillstone system into its existing Delaware Basin platform to maximise uptime and redundancy for its producer customers.
NGL CEO Mike Krimbill said: “We have made substantial progress in our ongoing water strategy in the Delaware Basin, and the Hillstone acquisition represents another important milestone for our Water Solutions franchise following the closing of our combination with Mesquite in July.”
The water volumes on Hillstone’s Northern Delaware Basin system are supplied using multiple, large-diameter pipelines.
NGL executive vice president of water solutions Doug White said: “The certainty of offtake and reliability of our integrated system of large diameter pipelines will provide approximately 2.7 million barrels per day of operational disposal capacity in the Delaware Basin, including the addition of Hillstone.”
The transaction is expected to be completed this year.
It is subject to satisfactory closing conditions, which includes expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
In August, NGL Energy Partners had signed an agreement to sell TransMontaigne Product Services, and associated assets for approximately $300m (£244m).