Crestwood chosen for Occidental’s delineation programme in PRB

US-based companies Crestwood Equity Partners and Occidental Petroleum have signed a new gathering and processing agreement.

Crestwood will provide wellhead services for Occidental’s 2020 delineation programme in the Powder River Basin (PRB).

The agreement covers the eastern part of the existing Jackalope Gas Gathering Services system. Crestwood fully acquired this system from Williams in April for a cash consideration of $484.6m.

Industry experts consider Occidental one of the largest operators in the PRB with around 400,000 net undeveloped acres.

Meanwhile, Crestwood said that it has begun commercial operations at the Bucking Horse II processing plant in the PRB Converse County, Wyoming.

The plant has a processing capacity of 200 million cubic feet per day (Mmcf/d). This brings the company’s total processing capacity in the basin to 345Mmcf/d, allowing it to provide natural gas and gas-liquid recoveries.

Crestwood Equity Partners chairman, president and CEO Robert Phillips said: “I want to congratulate all of the Crestwood employees that did a tremendous job to bring the plant into service safely and under-budget and we are excited to welcome Occidental, a premier investment-grade operator, to our customer base in the basin.

“The multiple stacked plays in the basin provide enormous potential for our producers and, as a result, capital continues to be allocated to growing oil production in the basin.

“Crestwood is pleased to be the largest full-service gathering and processing company in the Powder River Basin and will continue to work with our customers and off-set producers to support their drilling and development plans in the coming years.”

In May 2015, the company signed a deal to buy its affiliate Crestwood Midstream Partners, creating a single entity valued at $7.5bn.