MIDSTREAM NEWS

ETP, Sunoco Logistics Complete Project Financing for DAPL, close Minority Interest sale

Energy Transfer Partners LP and Sunoco Logistics Partners LP have completed approximately $3.4 billion of committed debt financing and equity transactions, including the project financing for the Dakota Access Pipeline (DAPL) and Energy Transfer Crude Oil Pipeline projects (collectively the Bakken Pipeline), as well as the closing of the previously announced sale by ETP and SXL of a 36.75% interest in the Bakken Pipeline to MarEn Bakken Company LLC, an entity owned by MPLX LP and Enbridge Energy Partners LP.

The completion of the project-level financing for the Bakken Pipeline provided Dakota Access LLC with access to the remaining $1.4 billion of cash proceeds under the previously announced $2.5 billion project financing facility, which Dakota Access will use to fund construction costs for its pipeline project.

Upon closing of the sale of a minority interest in the Bakken Pipeline to MarEn, ETP and SXL received $1.2 billion and $800 million in cash, respectively, which ETP and SXL plan to use to pay down debt and help fund current growth projects. As a result of this closing, ownership in the Bakken Pipeline is now as follows: ETP/SXL - 38.25%, MarEn 36.75% and P66 - 25%. ETP and SXL own 60% and 40%, respectively, of the combined 38.25% equity interest in the Bakken Pipeline.

MPLX subsidiary to purchase Ozark Pipeline

MPLX LP's MPLX Pipe Line Holdings LLC subsidiary (MPLH) has entered into an asset purchase agreement with Enbridge Pipelines (Ozark) LLC, under which an affiliate of MPLH has agreed to purchase Enbridge's Ozark Pipeline for approximately $220 million. The Ozark pipeline is a 433-mile, 22-inch crude oil pipeline originating in Cushing, OK, and terminating in Wood River, IL, capable of transporting approximately 230,000 b/d. An open season conducted by Enbridge Pipelines (Ozark) LLC received sufficient long-term volume commitments to plan an expansion of the pipeline's capacity to approximately 345,000 b/d. The expansion project design includes increasing the horsepower at pump stations along the pipeline and adding drag-reducing agents to the crude oil. The expansion project is expected to be complete in the second quarter of 2018.The purchase transaction is expected to close in the first quarter of 2017.

Five Point Capital Partners, Matador Resources form JV

A wholly owned subsidiary of Five Point Capital Partners LLC and Matador Resources Co. have together formed San Mateo Midstream LLC to own, operate and expand natural gas, crude oil, and produced water midstream assets in the Delaware Basin, including Matador's midstream assets in Eddy County, New Mexico and Loving County, Texas.

At formation, Five Point and Matador owned 49% and 51% of the JV, respectively, with Matador's midstream team continuing to operate the midstream assets.

The implied value of the assets and the associated gathering, processing and disposal agreements entered into with Matador was approximately $500 million at closing. Funding includes an initial cash consideration of $176.4 million by Five Point and certain of its co-investors, with a subsidiary of Matador contributing the midstream assets. The parties have committed to spend up to an additional $150 million in aggregate to expand the JV's midstream operations and asset base.

The JV expects to expand the Black River Cryogenic Processing Plant in Matador's Rustler Breaks asset area from its current inlet capacity of 60 MMcf/d to as much as 260 MMcf/d. This expansion is expected to be operational as early as the first quarter of 2018 and serve both Matador and third party customers. The JV also plans to accelerate the buildout of oil, natural gas and water gathering lines throughout both the Rustler Breaks and Wolf asset areas, as well as to drill and complete at least one additional commercial salt water disposal well in the Rustler Breaks asset area in 2017. Matador retained its ownership in certain midstream assets owned in South Texas and North Louisiana.

In connection with the JV, Matador dedicated its current and future leasehold interests in the Rustler Breaks and Wolf asset areas pursuant to 15-year, fixed-fee natural gas, oil and salt water gathering agreements and salt water disposal agreements, as well as a natural gas processing agreement. The JV will provide Matador with firm service under each of these agreements in exchange for certain minimum volume commitments.

HEP to expand deep-water terminal in Port Arthur, Texas

Howard Midstream Energy Partners LLC (HEP) has executed a long-term terminal services agreement (TSA) with a third-party shipper and plans to expand its bulk liquids terminal facility in Port Arthur, Texas. Under the TSA, HEP will construct or install more than 15 new tanks adding more than 1 million barrels of storage for a variety of products, and construct new marine facilities for both blue water and inland marine vessels. Additionally, the company plans to construct a pipeline system to transport products between the HEP's Port Arthur facilities and other third-party supply points. Permitting for the development began in the first quarter of 2016; final engineering of the facilities and pipelines is underway and construction is expected to begin in March. The facility is projected to take 18 months to construct and operations are expected to begin in 2018. HEP's Port Arthur Terminal can be expanded to include up to 24 million barrels of storage, and multiple blue water and inland marine docks. HEP's Port Arthur facility sits 13 miles off the Gulf of Mexico. The site currently includes more than eight miles of rail with a unit-train loop track and railcar loading/unloading facilities, four storage tanks with a total capacity of 230,000 barrels, and more than 3,000 feet of deep-water frontage.

WhiteWater begins Delaware Basin pipeline construction

Austin, TX-based WhiteWater Midstream has begun construction of the Agua Blanca Pipeline, a Delaware Basin, intrastate natural gas pipeline. The initial path will be from Orla, Texas to the Waha Hub, servicing portions of Culberson, Loving, Pecos, Reeves and Ward counties. Agua Blanca will have multiple direct downstream connections including to the Trans-Pecos Header.

Agua Blanca will initially consist of 75 miles of 36" diameter pipe with a capacity of 1.25 Bcf/d, expandable to 1.75 Bcf/d. The project is supported by over 500 MMcf/d of long-term, firm volume commitments. WhiteWater expects to accept first volumes by the fourth quarter of 2017.