... Apache Midstream, ARM Energy to Develop $100M NGL Pipeline System

Apache Midstream, ARM Energy to Develop $100M NGL Pipeline System

Houston-based Apache Midstream is partnering with ARM Energy Holdings to develop a $100 million natural gas pipeline system.

Apache Midstream, a subsidiary of Apache Corp., and ARM Energy announced May 14 that ARM Energy’s affiliate, Salt Creek Midstream LLC, is developing SCM Alpine LLC, a 445,000 barrels per day (bpd) capacity natural gas liquids (NGL) header system. Apache Midstream has also signed an option to acquire a 50 percent stake in the Alpine header system.

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Construction has commenced, and the project is expected to be operational in the first quarter 2019. ARM Midstream Management LLC, an affiliate of ARM Energy, will construct, manage and operate the system. The project is expected to cost $100 million and is supported by 10-year commitments from both Salt Creek and Apache Corp. The term of the commitments may be automatically extended twice for an additional five years for a potential term of 20 years.

The Alpine header system will be comprised of two pipeline segments that originate at both the Salt Creek and Apache processing facilities in southern Reeves County, Texas. The pipeline will provide flexibility by transporting the NGLs to Waha, Texas, where it will have the ability to interconnect to downstream pipelines providing access to Mont Belvieu and Corpus Christi fractionation facilities.

“The development of this NGL project is another significant step in Apache’s Alpine High infrastructure buildout,” said Brian Freed, Apache Corp. senior vice president of midstream and marketing. “This project provides Apache access to the emerging Waha market area, increasing the company’s long-term operational flexibility and market optionality.”

In April 2018, ARM Energy announced a strategic partnership with Ares Management LP to develop Salt Creek in the Delaware Basin. Salt Creek and Alpine are both owned by funds managed by the Ares Private Equity Group and ARM Energy.

“We have a deep understanding of the fundamentals driving upstream and midstream economics and their impact on the Gulf Coast downstream markets,” said ARM Energy CEO Zach Lee. “We believe Alpine is well-positioned to provide market optionality leading to netback advantages for its customer base.”

Locke Lorde LLP provided legal representation to ARM Energy/Salt Creek and Bracewell LLC represented Apache.

Formed in 2017, Salt Creek Midstream is a joint venture of ARM Energy and funds managed by Ares. Salt Creek is a full service midstream provider, offering gas and crude gathering, compression, cryogenic processing and treating services. The greenfield development project spans more than 250,000 acres across Culberson, Reeves, Ward, Winkler, Lea, Pecos, and Eddy counties within the Delaware Basin of Texas.

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