Crestwood completes acquisition of Arrow Midstream for $750m

Midstream assets owner and operator Crestwood has completed its previously announced acquisition of the US-based energy company Arrow Midstream in a transaction worth $750m.

Crestwood general partner chairman, president and chief executive officer Robert Phillips said that the acquisition gives the company access to the Bakken shale.

"The Arrow transaction demonstrates the execution of our growth strategy in liquids-focused shale plays, where we can utilise existing assets to provide additional services to our customers and enhance returns for our investors," Phillips added.

About 460 miles of gathering pipeline, composed of 150 miles of crude oil gathering pipeline, 160 miles of natural gas gathering pipeline and 150 miles of water gathering lines, are owned and operated by Arrow.

The system has existing volumes of around 50,000 barrels per day (Bbls/d) of crude oil, 15 million cubic feet per day (MMcf/d) of rich natural gas as well as 8,500 Bbls/d of produced water.

The area provides the potential for significant long-term production growth. At present there are nine drilling rigs running in the area with additional rig activity in areas located next to the Arrow systems. It is estimated to have more than 1,000 potential drilling locations.

The Arrow systems are being expanded at present to increase gathering capacities to 125,000 Bbls/d of crude oil, 100 MMcf/d of natural gas, and 40,000 Bbls/d of produced water with a total cost of approximately $80m over the next 18 to 24 months.

Crestwood hopes to complete an initial phase of the expansion in the fourth quarter, designed to gather natural gas that is being flared currently.