... NGL Energy Acquires Rimrock’s Share in Grand Mesa Pipeline

NGL Energy Acquires Rimrock’s Interest in Grand Mesa Pipeline

NGL Energy Partners LP has struck a deal to buy Rimrock Midstream LLC’s 50 percent interest in Grand Mesa Pipeline LLC. NGL now owns 100 percent of the pipeline system.

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Grand Mesa Pipeline completed a successful open season on Oct. 3 to secure multiple significant long-term shipper commitments. The system will include more than 550 miles of new crude oil transportation pipeline, multiple truck injection bays, more than 1 million barrels of operational storage and at least two origination points located near Lucerne and Kersey (Riverside Station) in Weld County, Colorado. The system is in active development and is scheduled to commence service in the fourth quarter 2016. Rimrock will construct and operate the pipeline system.

The acquisition strengthens NGL’s diversified midstream business, adding significant fee-based revenue backed by long term contracts. The Grand Mesa Pipeline will help further develop the crude and condensate rich DJ and Wattenberg fields and provide additional options for transporting crude oil to U.S. markets and refineries in the Midwest, including the NYMEX designated hub of Cushing, Oklahoma. NGL will have ownership in two long haul crude oil pipelines that terminate into NGL’s Cushing Terminal Facility which provides additional revenue opportunities for NGL, its shippers and refinery customers. A significant portion of the committed crude oil volumes will be tied to Grand Mesa via gathering systems, reducing the need for trucked volumes.

Following the agreement, Rimrock entered into a subsequent agreement to construct and operate the Grand Mesa Pipeline. In addition, Rimrock is actively developing the Platte River gathering system that will deliver significant volumes of crude oil to Grand Mesa’s origin point at Lucerne. The gathering system will consist of more than 220 miles of pipeline and will be capable of delivering multiple grades of crude oil from several counties throughout north central and eastern Colorado.

“The sale of our interest in Grand Mesa, the construction and operations agreements with Grand Mesa and our development of the Platte River gathering system greatly strengthen our financial and strategic position as a midstream growth company,” said Matt Valentine, Rimrock’s chief financial officer.

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