Crestwood to acquire Arrow Midstream for $750m

US-based Crestwood Arrow Acquisition, a subsidiary of Crestwood Midstream Partners, has signed an agreement to acquire Arrow Midstream Holdings for approximately $750m.

The deal will increase the company’s operational footprint in the Bakken shale, and is expected to benefit the recent merger of Crestwood and Inergy Midstream, completed on 7 October 2013.

Crestwood Arrow plans to own and operate crude oil, natural gas and water gathering systems situated on the Fort Berthold Indian Reservation in the core of the Bakken Shale in McKenzie and Dunn Counties in North Dakota.

The Arrow gathering system comprises around 460 miles of gathering pipeline, including 150 miles of crude oil pipeline, 160 miles of natural gas, and 150 miles of water.

The system can handle 50,000 barrels of crude oil a day, 15 million standard cubic feet per day of natural gas and 8,500 barrels of water.

The company has also acquired salt water disposal wells and a 23-acre central delivery point with multiple pipeline take-away outlets and a fully-automated truck-loading facility.

The Arrow systems are situated around 60 miles southeast of Crestwood’s COLT Hub crude rail and pipeline terminal, located in the Williams County of North Dakota. It holds direct connectivity with COLT through the Hiland and Tesoro crude oil pipeline systems.

Crestwood Midstream Partners chairman, president and CEO Robert G Phillips said that the addition of arrow assets will help the company to execute its growth strategy following the recently closed merger with Inergy.

"The Bakken Shale is a core area for our future growth, and by extending our platform upstream of COLT, Crestwood will be expanding and optimising the full suite of liquids value chain services we can provide for both our producer and demand-side customers," Phillips added.

The transaction is expected to be completed in the fourth quarter of 2014.

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Image: Arrow Midstream holds about 460 miles of gathering pipeline. Photo: courtesy of SeanMack.