Plains All American and Oryx Midstream Holdings, a portfolio company of Stonepeak Infrastructure Partners are to merge their respective assets, operations, and commercial activities within the Permian Basin into a newly formed strategic joint venture, Plains Oryx Permian Basin.
The transaction will include all of Oryx’s Permian assets and, except for Plains’ long-haul pipeline systems and certain of its intra-basin terminal assets, the vast majority of Plains’ assets located within the Permian Basin.
The joint venture will be owned 65%/35% by Plains and Oryx respectively with the former serving as operator. A joint operating committee that includes representatives from Plains and Oryx will provide oversight on material JV operating and commercial decisions.
“This is a very positive announcement for Plains, Oryx and our Permian Basin customers,” said Willie Chiang, chairman and CEO of Plains All American. “This joint venture is a natural combination and logical next step to optimizing our highly complementary systems. Structured as a debt-free JV entity through a cashless transaction, this aligns with Plains’ financial and portfolio optimization strategies, is near-term free cash flow accretive to Plains and Oryx and reinforces Plains’ ability to maximize free cash flow for our investors, while enhancing our overall credit profile.”
The Permian joint venture will include around 5,500 miles of pipeline, around 6.8 mmb/d of pipeline system multi-segment capacity. There will be direct downstream connections to all major intra-basin and downstream markets, and around 4.1 million dedicated system acres, including supply and facilities dedications.
The Plains assets comprising a part of the JV include approximately 3,900 miles of pipeline and related operational storage capacity located within the Permian Basin, long-term acreage dedication and marketing agreements covering approximately 2.8 million acres, and supply and facilities dedications. Plains’ long-haul pipeline systems and certain of its intra-basin terminal assets will not be included within the JV.
The Oryx assets comprising a part of the JV include approximately 1,600 miles of pipeline and related operational storage capacity located within the Permian Basin, in addition to long-term acreage dedication and marketing agreements covering approximately 1.3 million acres. For more information visit: www.paalp.com
