Plains All American and Oryx Midstream Holdings LLC, a portfolio company of Stonepeak Infrastructure Partners, have entered into a definitive agreement to merge assets, operations, and commercial activities within the Permian basin into a new joint venture, Plains Oryx Permian Basin LLC.
The deal will include all of Oryx’s Permian assets and, with the exception of Plains’ long-haul pipeline systems and certain of its intra-basin terminal assets, the vast majority of Plains’ assets are within the Permian basin.
The JV will be operated by Plains with a 65% interest. Oryx will hold 35%.
The joint venture will hold about 5,500 pipeline miles, 6.8 million b/d of pipeline system multi-segment capacity, direct downstream connections to all major intra-basin and downstream markets, and about 4.1 million dedicated system acres, including supply and facilities dedications. The companies expect about $50 million in operational, cost, and capital synergies on a run-rate basis within 12 months.
The Plains assets comprising a part of the JV include 3,900 miles of pipeline and related operational storage capacity located within the Permian basin, long-term acreage dedication, and marketing agreements covering some 2.8 million acres, and supply and facilities dedications.
The Oryx assets include some 1,600 miles of pipeline and related operational storage capacity in the Permian basin, in addition to long-term acreage dedication and marketing agreements covering about 1.3 million acres.
Subject to closing conditions (including refinancing by Oryx of existing debt) and regulatory approvals, the merger agreement is expected to close in this year’s fourth quarter.
