Joint Venture To Build Takeaway Capacity in the Permian
Concho Resources and Frontier Midstream Solutions IV have executed an agreement to create Beta Crude Connector (BCC). Concho and Frontier will each own a 50% equity interest in BCC, with Frontier serving as operator. BCC will build and provide crude oil gathering, transportation, and storage services in the northern Midland Basin.
This is the second JV created by the companies to create pipeline systems in the Permian Basin.
The BCC gathering and transportation system will consist of an approximately 100-mile gathering system, 250,000 bbl of crude oil storage facilities, as well as truck terminals. The pipeline system will have the initial capacity to deliver 150,000 B/D of crude oil to multiple delivery points, accessing local refineries and connecting to several downstream pipelines. Following an open season set for April 2019, construction will begin, targeting initial flows in mid-2019.
BCC will file for Federal Energy Regulatory Commission authority to operate as a common carrier pipeline and solicit interest from other producers and marketers for capacity on the new system. In conjunction with the joint venture agreement, Concho has agreed to enter into a long-term acreage dedication agreement with BCC.
“We are excited to partner again with Frontier in the development of the Beta Crude Connector. Through the joint venture, we will leverage Frontier’s midstream expertise and enhance the value of our high-quality footprint in the Midland Basin with a reliable, cost-efficient gathering and transportation solution. Importantly, this is a compelling investment opportunity that we can make with no changes to our capital plans,” said Jack harper, president of Concho.
Dave Presley, Frontier’s CEO, said, “We are pleased that Beta Crude Connector will be the latest of our full-service midstream solutions and our second joint venture partnership with Concho as we demonstrate our commitment to quality partnerships and solutions for producers once again. We are pleased to have a world-class producer in Concho as our partner and are excited with the quality of the resource behind it. We are dedicated to the successful operations and growth of the Beta Crude Connector.”
The earlier JV was the Alpha Crude Connector (ACC), established in 2014 to construct a crude oil transportation system in the northern Delaware Basin.
ACC, which was the first large-scale crude oil gathering system in the northern Delaware Basin, includes a 515-mile gathering system as well as crude oil storage facilities, truck terminals, and multiple receipt points. The pipeline system became operational in late 2015.
In 2017, Concho and Frontier each sold their interests in ACC to Plains All American Pipeline in a $1.2-billion deal.
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08 October 2020
09 October 2020
09 October 2020