Noble Midstream Partners has secured an equity investment commitment, worth $200m, from Global Infrastructure Partners Capital Solutions Fund (GIP) to fund capital needed for a 30% stake in the EPIC Crude Pipeline in Texas.
Image: Noble Midstream’s stake in the EPIC Crude Pipeline is held through the newly-created subsidiary Dos Rios Crude Intermediate. Photo courtesy of renjith krishnan/FreeDigitalPhotos.net.
Noble Midstream’s stake in the EPIC Crude Pipeline is held through the newly-created subsidiary Dos Rios Crude Intermediate.
The 1,126km long crude oil pipeline, which will serve producers in the Permian Basin and Eagle Ford, is being laid from Orla to the Port of Corpus Christi. Expected to have initial throughput capacity of 590,000 barrels per day, the pipeline project is targeted to enter into interim service in the second half of 2019 with full transportation capacity to be achieved in January 2020.
According to Noble Midstream, $100m of the $200m equity investment from GIP, will be funded during the first quarter of this year, while the remaining $100m will be available for a one-year period, subject to certain preceding conditions.
Noble Midstream chief financial officer John Bookout said: “We look forward to having GIP as our partner given their extensive energy investing track record and believe this transaction is a further endorsement of our investment in the EPIC Crude Pipeline.
“This Preferred Equity provides an attractive funding source for the Partnership, allowing us to maintain a prudent balance sheet without issuing common equity as the EPIC Crude Pipeline progresses.
“We are excited to capitalize on the growing demand for crude oil takeaway and export capability from the Permian Basin and look forward to adding a high-quality source of cash flow to our portfolio.”
Last month, EPIC Midstream signed multiple deals, including one with Noble Midstream, to reduce its stake in the 30inch EPIC Crude Pipeline to 45%. Following the closing of the deals, the other stakeholders in the pipeline project will be Altus Midstream (15%) and Rattler Midstream (10%), a subsidiary of Diamondback Energy.
The crude oil pipeline project will also involve construction of some terminals with Port of Corpus Christi connectivity and export access. Through the installation of additional pumps and storage, EPIC Crude Pipeline is expected to increase its capacity to nearly 900 MBbl/d.