Silver Creek Midstream LLC closed the acquisition of Genesis Energy’s Powder River basin crude gathering, storage, and rail assets (trunkline system) and will pursue identified projects to address demand for crude oil midstream services in the basin with equity from a joint venture formed by Tailwater Capital LLC and Energy & Minerals Group. The combine provides Silver Creek with $600 million to acquire and expand the existing pipeline and storage assets in the basin.
Pro forma for the acquisition, Silver Creek's existing Powder River basin footprint will include:
• More than 190 miles of crude trunkline and gathering pipelines.
• More than 190,000 b/d of initial pipeline capacity from the Silver Creek Pronghorn Terminal to the Guernsey Hub, with expansion up to 325,000 b/d.
• Three key existing interconnections to downstream markets out of Guernsey.
• More than 1.1 million bbl of crude storage with an additional 800,000 bbl permitted.
• Rail capability in and out of the Silver Creek Pronghorn Terminal in Converse County.
• Batching capabilities that will initially accommodate three specs of crude oil.
• Trucking capability through a transport fleet to meet interim service needs as pipelines are constructed.
Silver Creek has secured long-term acreage dedications and will begin construction in this year’s fourth quarter to further develop the existing gathering infrastructure by an initial 52 miles of crude pipelines and over 100,000 bbl of additional storage.
“The existing Genesis Gathering System and Intrastate Pipeline combined with our new growth projects will give Silver Creek the ability to offer a comprehensive crude midstream solution across Converse, Campbell, Johnson, and Natrona counties,” said Patrick Barley, founder and chief executive officer of Silver Creek. When the deal closes, he said, Silver Creek will have over 330,000 acres dedicated to its system long-term, and it anticipates growing dedications further in the coming months.