Noble Midstream to invest in the EPIC Crude and EPIC Y-Grade Pipelines

Noble Midstream to invest in the EPIC Crude and EPIC Y-Grade Pipelines

Noble Midstream Partners has announced it has exercised and closed its option with EPIC Midstream Holdings, LP (EPIC) to acquire a 15 percent equity interest in the EPIC Y-Grade Pipeline. 

In addition, Noble Energy has assigned Noble Midstream its option to acquire a 30 percent equity interest in the EPIC Crude Oil Pipeline and Noble Midstream has exercised its option with EPIC. 

Noble Midstream’s total cash equity investment is anticipated to be approximately $165m to $180m for the EPIC Y-Grade Pipeline and $330m to $350m for the EPIC Crude Oil Pipeline. 

The Partnership anticipates that the addition of meaningful Permian long-haul transportation to the portfolio will provide a future source of stable and predictable cash flows. It also expects that 

both investments are to have robust economics, with returns and build multiples that compete with the very best opportunities in the Partnership’s portfolio.

“We are excited to work with our new partners and participate in the EPIC projects, capitalising on the growing demand for crude oil and NGL takeaway and export capability from the Permian Basin. These additions are complementary to our existing portfolio, enhance our customer diversification, and will add a stable and high-quality source of cash flow from a premier U.S. unconventional basin. In addition, Noble Midstream is uniquely positioned to realise value across the entirety of the crude oil value chain, from our wellhead gathering facilities in the Delaware Basin to long-haul transportation to the Gulf Coast,” stated Terry Gerhart, Chief Executive Officer of the general partner of Noble Midstream.

The 24-inch EPIC Y-Grade Pipeline is an approximately 700-mile pipeline linking NGL reserves in the Permian and Eagle Ford to Gulf Coast refiners, petrochemical companies, and export markets. 

The pipeline will have a throughput capacity of approximately 440 MBbl/d with multiple origin points. The project scope includes approximately 180 MBbl/d of initial fractionation capacity, scalable to provide maximum flexibility, as well as associated purity product take-away in Chorpus Christi. Construction of the third and final phase of the EPIC Y-Grade Pipeline from Benedum Plant to Robstown, Texas is approximately 60 percent complete.

The 30-inch EPIC Crude Oil Pipeline has a current capacity of 590 MBbl/d from the Delaware Basin to the Gulf Coast. With the installation of additional pumps and storage, EPIC can increase the 30-inch capacity to approximately 900 MBbl/d. Construction of the 30” pipeline is expected to commence in February, and significant construction synergies between the Crude and Y-Grade pipelines are anticipated.

Because of high customer demand for crude oil transportation, EPIC announced in October 2018 the decision to utilise the third and final phase of its EPIC Y-Grade Pipeline from Crane, Texas to Corpus Christi, Texas for crude oil service while the EPIC Crude Oil Pipeline and EPIC NGL fractionator remains under construction. Interim service remains on track for startup in the third quarter of 2019. The EPIC Y-Grade Pipeline will convert back to NGL service at completion of the EPIC Crude Oil Pipeline in January of 2020.

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6th February 2019