Enterprise buys natural gas-heavy Navitas as an entry point into the “attractive” Permian Midland


Houston’s Enterprise Products Partners LP has agreed to acquire Navitas Midstream Partners LLC for $ 3.25 billion, giving the huge partnership an entry point into the Permian Basin of west Texas and additional natural gas processing capacity of 1 billion cubic feet per day .

The agreement to acquire Navitas, based north of Houston in The Woodlands, could close by the end of March, with a corporate subsidiary planning to use cash and existing loans for the transaction.

Management praised the move as a strong opening for the natural gas processing and natural gas liquids (NGL) business in the Permian Midland Basin, which Co-CEO Jim Teague described as “the most attractive in the US”.

“We have no natural gas or NGL presence in the Midland Basin other than downstream pipelines,” said Teague. “This acquisition will give us an entry point into the pool.”

Navitas, supported by private equity firm Warburg Pincus LLC, has secured around 1,750 miles of gas collection lines since development began seven years ago. The latest project, the Leiker plant, should be completed in the first quarter. With Leiker, Enterprise would have 1 billion cubic feet per day of cryogenic gas processing capacity in Midland.

The Leiker facility would be the fifth facility Navitas is building as part of its Midland Basin Processing Complex in West Texas near the Midland and Glasscock County Lines.

The complex has connections to seven pipelines, including the Enterprise North Texas Pipeline. It also has NGL connections to the Chevron Phillips Chemicals Co.’s Chemical EZ Pipeline, the Sand Hills Pipeline, the Oneok Hydrocarbon liquefied gas pipeline, and the Shin Oak Pipeline.

Enterprise already has a bundle of assets in Midland’s twin basin, the Delaware, which extends into New Mexico. The portfolio includes the 2.6 million bbl Midland Terminal in West Texas and stakes in the Midland-to-ECHO and Basin pipeline systems that supply crude oil to the Cushing Hub in Oklahoma and the Texas coast near by Transport Houston.

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Company executives said Midland offers one of the most lucrative opportunities, given that it is currently home to about 20% of the country’s onshore drilling activity.

“The system, including its large presence in low pressure natural gas production, is an attractive processing company that provides value-added services to producers,” said Randy Fowler, general partner of Enterprise.

The Midland produced 5.4 billion cubic feet per day in 2020 and produced about 6% of all dry natural gas production in the United States. according to energy information management.


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