$207 million pipeline deal made

A Dallas-based company has completed a $207 million acquisition of local natural gas pipelines and processing infrastructure, and says it also has deals with two energy companies to expand those assets to help meet their future needs.

Summit Midstream Partners, LLC, which also goes by the name Summit Investments, said in a news release Tuesday that it completed the acquisition of ETC Canyon Pipeline, LLC, from La Grange Acquisition, L.P., a subsidiary of Energy Transfer Partners, L.P.

ETC Canyon Pipeline gathers and processes natural gas from wells in the Piceance and Uinta basins in Colorado and Utah. It operates primarily based on long-term, fee-based agreements with more than 50 customers including WPX Energy, Noble Energy, Black Hills Exploration and Production, Laramie Energy II, Encana USA, ExxonMobil and Antero Resources, Summit said.

The purchased assets include more than 1,600 miles of pipe, 44,000 horsepower of compression, processing facilities with a total capacity of 97 million cubic feet of gas per day, and two natural gas liquids injection stations. Summit said the assets will be held by its subsidiary, Red Rock Gathering Co., LLC, which also owns a gathering system in the Sand Wash Basin in northern Colorado that was acquired earlier this year.

Summit said Red Rock also has two new long-term agreements with WPX Energy and Black Hills Exploration and Production Inc. Collectively, they commit a minimum of more than 305 billion cubic feet of natural gas to be handled by Red Rock.

“Red Rock will expand its existing gathering and compression services for WPX by constructing gas gathering infrastructure to connect new WPX production” in the Rifle area, Summit said.

It said that project will be developed and commissioned over the next several years.

“Red Rock will also construct a processing plant and related gas gathering infrastructure (in the De Beque area) which will support Black Hills’ future development of their liquids-rich Mancos and Niobrara acreage,” Summit said.

Black Hills has proposed an exploratory drilling project in the De Beque area. The Mancos and Niobrara shale formations lie beneath the Mesaverde sandstone that energy companies typically have been tapping for natural gas locally. Energy companies have been eyeing those deeper formations for their potential to produce gas, natural gas liquids and oil.

Red Rock’s Black Hills project is expected to be completed by the end of next year, Summit said.

Summit was formed in 2009 and last year made its initial expansion to the Rockies by buying part of Encana’s Piceance Basin distribution systems for $590 million.

Summit also has holdings in Texas. It became a public company in September, in a $250 million initial public offering with shares priced at $20 each. Its stock dropped slightly to $20.48 Tuesday after opening for the day at $20.50.


COMMENTS

Commenting is not available in this channel entry.


TOP JOBS
Search More Jobs





THE DAILY SENTINEL
734 S. Seventh St.
Grand Junction, CO 81501
970-242-5050; M-F 8:00 - 5:00
Editions
Subscribe to print edition
E-edition
Advertisers
Advertiser Tearsheet
Information

© 2015 Grand Junction Media, Inc.
By using this site you agree to the Visitor Agreement and the Privacy Policy