Plains All American, Noble Midstream to form JV, buy Advantage Pipeline

Feb. 13, 2017
Plains All American Pipeline LP and Noble Midstream Partners LP have agreed to form a 50-50 joint venture to acquire Advantage Pipeline LLC, which owns a 70-mile, 16-in. crude oil pipeline in the southern Delaware basin.

Plains All American Pipeline LP and Noble Midstream Partners LP have agreed to form a 50-50 joint venture to acquire Advantage Pipeline LLC, which owns a 70-mile, 16-in. crude oil pipeline in the southern Delaware basin.

The JV will acquire Advantage for $133 million. The majority of PAA’s 50% share is expected to be paid in PAA units issued to certain sellers at closing.

The Advantage system has a capacity of 150,000 b/d originating in eastern Reeves County in Texas, extending through Pecos and Ward Counties to Crane County. The Advantage line also includes 490,000 bbl of combined crude storage at three separate trucking stations.

Noble will serve as operator and will construct a 15-mile pipeline to deliver crude to the Advantage system from its central gathering facility in the southern Delaware basin. PAA will construct a pipeline to connect its Wolfbone Ranch facility to the Advantage line near Hwy 285. The connections are expected to be completed in this year’s second quarter.

The Advantage system will be contractually supported by an acreage dedication from Noble Energy Inc. and a volume commitment from Plains Marketing LP.

PAA in January agreed to acquire 100% interest in Alpha Holding Co. LLC, which indirectly owns the Alpha Crude Connector (ACC) gathering system in the northern Delaware basin, for $1.215 billion (OGJ Online, Jan. 26, 2017).

That month, the firm also announced planned expansions on its Cactus Pipeline from McCamey to Gardendale in Texas to 390,000 b/d, and its 50%-owned BridgeTex Pipeline from Colorado City to Houston in Texas to 400,000 b/d.