Houston-based Noble Midstream Partners LP has created a joint venture with Greenfield Midstream, LLC in the $625 million purchase of Saddle Butte Rockies Midstream based in Denver, Colorado.
The joint venture will be named Black Diamond Gathering, LLC.
Noble plans to fund 50% of the purchase price and will get a 4.4% ownership in the joint venture. The Partnership’s 54.4% ownership will be held in a wholly-owned Noble Midstream subsidiary named Laramie River DevCo LP. Greenfield Midstream, an Encap Flatrock Midstream portfolio company will own 45.6% of the joint venture.
Saddle Butte has 160 miles of pipeline, 300,000 barrels a day of delivery capacity and nearly 210,000 barrels of crude oil storage capacity. It also has nearly 115,000 dedicated acres from six customers under fixed fee arrangements.
Noble Midstream plans to operate and control the Saddle Butte system upon closing which is expected in the first quarter of 2018.
The purchase not only expands Noble Midstream’s third-party customer base but brings an average of seven rigs on Saddle Butte dedicated acreage. It increases Noble’s 2017 average rig exposure to 11 in the DJ Basin in northern Colorado.
It will also result in more oil flowing through Noble Midstream pipelines to storage tanks at Cushing, Oklahoma.