An operating subsidiary of Western Midstream Partners LP (WES) has agreed to acquire privately held Meritage Midstream Services II LLC, Denver, in an $885 million, all-cash deal that is expected to expand WES’s existing Powder River basin asset base and increase total natural gas processing capacity to 440 MMcfd.
Meritage owns and operates a large-scale natural gas gathering and processing business in the Powder River basin of Wyoming in Converse, Campbell, and Johnson counties, which include about 1,500 miles of high- and low-pressure natural gas gathering pipelines, about 380 MMcfd natural gas processing capacity, and the Thunder Creek NGL pipeline; a 120-mile, 38,000 b/d FERC-regulated NGL pipeline that connects to Meritage’s processing infrastructure.
Currently, Western Midstream operates the Hilight complex in northeast Wyoming, processing gas from coal-bed methane in the Powder River basin and producing fields in Johnson, Campbell, Natrona, and Converse counties. It also operates two complexes in southwest Wyoming—the Granger Complex, which processes gas from the Moxa Arch and Jonah and Pinedale Anticline fields; and Red Desert, which processes natural gas and fractionates NGLs produced in the eastern Greater Green River Basin.
The Meritage assets are supported by more than 1.4 million dedicated acres with an average remaining contract life of approximately 8 years.
Completion of the transaction is expected in this year’s fourth quarter, subject to customary closing conditions and regulatory approvals.