Milestone: EagleClaw Midstream announces FID on pipeline

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[Context: On April 2, Blackstone Energy and I Squared Capital-backed EagleClaw Midstream announced final investment decision (FID) on a Permian pipeline and began commissioning a new cryo gas processing plant. Further details and related links are below.]


EagleClaw Midstream Announces Final Investment Decision on Delaware Link Pipeline, Expected In-Service Date for Pecos Bend IV Processing Facility, and Management Succession

MIDLAND, Texas & HOUSTON–April 02, 2019–(BUSINESS WIRE)–EagleClaw Midstream (“EagleClaw”), a portfolio company of Blackstone Energy Partners and I Squared Capital, announced today a series of commercial and organizational milestones.

Delaware Link Pipeline

First, EagleClaw announced that it has made a final investment decision to proceed with construction of the Delaware Link pipeline, a new pipeline designed to transport residue natural gas from the Delaware Basin to the Waha hub, with access to further downstream takeaway connections. Delaware Link is expected to be anchored by residue volumes from EagleClaw’s processing facilities as well as third-party customers. The approximately 40 mile, 30″ diameter pipeline will originate at EagleClaw’s three existing natural gas processing complexes in Reeves County, Texas (East Toyah, Pecos, and Pecos Bend) and will have transportation capacity of at least 1.2 Bcf/d. Given the level of producer inquiry, EagleClaw is also evaluating increasing the pipeline’s diameter and related transportation capacity.

Delaware Link is intended to provide E&Ps in the Delaware Basin further flow assurance and improved price realization by providing a direct, cost-advantaged path to Waha and multiple interconnections at Waha to various takeaway pipelines. These interconnections include, amongst others, direct access to the Permian Highway Pipeline, an approximately 2.1 Bcf/d pipeline designed to transport gas from Waha to the U.S. Gulf Coast and other premium priced markets. Permian Highway, a joint venture between Kinder Morgan, EagleClaw, Apache and an affiliate of another anchor shipper, is currently under construction and is expected to be in service in the second half of 2020.

Pecos Bend IV Processing Plant Update

Second, EagleClaw announced that it has begun commissioning of the company’s fourth cryogenic processing plant at its Pecos Bend site, Pecos Bend IV, with full operational in-service planned for May 2019. The completion of Pecos Bend IV, which was acquired in conjunction with EagleClaw’s 2018 acquisition of Caprock Midstream, will take EagleClaw’s total interconnected processing capacity in the Delaware Basin to 1.3 Bcf/d. The interconnected nature of EagleClaw’s three main processing sites – East Toyah, Pecos and Pecos Bend – provides heightened flow assurance and reliability for the company’s customers. EagleClaw is also working to connect its Sierra Grande site in Culberson County, which was recently acquired in conjunction with EagleClaw’s acquisition of Pinnacle Midstream, to the overall EagleClaw system via a high-pressure connector line, which should be complete by June 2019. “We are pleased by the progress with the construction of Pecos Bend IV since our acquisition of Caprock Midstream in late 2018,” stated Matt Wall, EagleClaw’s VP of Operations. “The interconnected nature of our newly-constructed processing sites and the increased scale of our operations is consistent with our mission of providing best-in-class service to Delaware Basin producers.”

Leadership and Organizational Changes

Finally, in conjunction with today’s announcements and the completion of the integration of Caprock Midstream and Pinnacle Midstream into EagleClaw, EagleClaw announced the retirement of Bob Milam as EagleClaw CEO and the promotion of Jamie Welch, previously EagleClaw President and CFO, to CEO. Mr. Milam co-founded EagleClaw in 2012, and under his leadership the company has grown into a leading, diversified midstream provider strategically located in the core of the Delaware Basin. Bob will remain on EagleClaw’s Board of Directors, serving as Vice Chairman.

David Foley, CEO of Blackstone Energy Partners and Chairman of EagleClaw’s Board, stated, “On behalf of EagleClaw’s Board and all stakeholders, I would like to thank Bob for his leadership in co-founding EagleClaw and helping to build the company into the leading midstream provider in the Delaware Basin. We are pleased that Bob will continue to bring his extensive experience, insights, and relationships to bear as Vice Chairman of EagleClaw.”

Bob Milam commented, “Today’s announcement is the next step in a succession planning process that our leadership team and Board have developed over the last several years. We have an outstanding team in place, and I have great faith in their capabilities. Jamie Welch brings extensive experience in the midstream sector and has made a significant contribution to the company’s success.”

Jamie Welch, incoming EagleClaw CEO, remarked, “I would like to thank Bob for his leadership in growing EagleClaw into the business it is today, and I look forward to his continued involvement as Vice Chairman. I am honored to serve as the company’s CEO and to partner with the company’s employees and stakeholders to continue to advance EagleClaw’s mission of providing best-in-class midstream services to Delaware basin producers.”

About EagleClaw Midstream

Headquartered in Midland and with a core presence in Houston, EagleClaw is focused on rapid response to the midstream infrastructure requirements of Permian producers. EagleClaw provides comprehensive gathering, transportation, compression, processing, and treating services necessary to bring natural gas, natural gas liquids, and crude oil to market. EagleClaw is the largest independent natural gas gatherer and processor in the southern Delaware Basin. EagleClaw is also partners with Targa on the Grand Prix Pipeline Project and with Kinder Morgan on the Permian Highway Pipeline Project. EagleClaw has in place long-term dedications for gas, crude, and water midstream services across half a million acres from over 25 successful and active producers in the Delaware Basin.

About Blackstone Energy Partners

Blackstone Energy Partners is Blackstone’s energy-focused private equity business, with a successful record built on our industry expertise and partnerships with exceptional management teams. Blackstone has invested or committed $16 billion of equity globally across a broad range of sectors within the energy industry. Blackstone (NYSE: BX) is one of the world’s leading investment firms. Our asset management businesses, with over $470 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis.

About I Squared Capital

I Squared Capital is an independent global infrastructure investment manager focusing on energy, utilities, telecommunications and transport in the Americas, Europe and Asia. The firm has offices in Hong Kong, Houston, London, Miami, New Delhi, New York, and Singapore.

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