MPLX LP has signed a definitive agreement to acquire Northwind Delaware Holdings LLC from Five Point Infrastructure LLC for $2.375 billion.
Northwind offers sour gas gathering, treating and processing services in Lea County, New Mexico. It has over 200,000 dedicated acres, more than 200 miles of gathering pipelines, two in-service carbon sequestration and acid gas injection wells with a combined capacity of 20 million cubic feet a day (MMcfd) and a third permitted well that will raise the capacity to 37 MMcfd when completed next year, a joint statement said.
“We’re proud to have played a key role in unlocking development potential in the Northern Delaware Basin, which we continue to expect will be one of the most important oil producing regions in North America”, said Five Point chief executive and managing partner David Capobianco.
“This transaction is a clear validation of our investment thesis regarding the need for critical infrastructure development across the nation’s most productive energy basins”.
Last May, Northwind said it had received a permit from the New Mexico Oil Conservation Commission for the new acid injection well at its Titan Treating Complex, increasing its permitted injection capacity in the Devonian formation of the Northern Delaware Basin to about 29 million standard cubic feet per day.
“The new well also provides additional redundancy for Northwind’s existing TAG [total acid gas] disposal operations at the Titan Treating Complex and will underpin the company’s previously announced expansion of the Titan Complex”, Northwind said in a press release May 29.
The Titan Complex currently has 150 MMcfd of high-circulation amine treating capacity and two AGI and carbon sequestration wells. Northwind said then it expects to complete a third train by mid-year 2025 to grow the complex’s treating capacity to 200 MMcfd. It has also made a FID (final investment decision) for a further increase to 400 MMcfd by 2026.
Meanwhile Northwind recently started up its fifth NACE standard compressor station with an initial capacity of 25 MMcfd, raising the company’s total compression capacity to around 225 MMcfd.
Northwind “is solving a highly critical issue in the Northern Delaware Basin, where upstream development has generally been restricted due to the lack of sour natural gas treating, acid-gas injection and sequestration well capacity”, said the statement by Five Point and MPLX.
Houston, Texas-based Five Point and Findlay, Ohio-based MPLX expect the transaction to be completed in the third quarter subject to federal antitrust clearance and other customary closing conditions, they said.
The price of $2.375 billion in the cash transaction is subject to customary adjustments, the companies said.
Piper Sandler & Co. was exclusive financial advisor and Latham & Watkins LLP served as legal advisor to Five Point.
To contact the author, email jov.onsat@rigzone.com
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