Chevron expands Noble Midstream partnership for crude transportation from DJ Basin

Houston — Chevron is deepening its ties to its recently acquired Noble Midstream business by putting Noble in charge of its crude oil gathering and intermediate transportation from the Well Ranch region of Colorado's DJ Basin.

Chevron acquired more than 60% ownership of Noble Midstream when it bought its parent, Noble Energy, last year in a major deal to extend its footprint in the Permian and DJ basins. Noble Midstream is strongest in the DJ Basin and Chevron is now making its first moves to strengthen those positions after appointing new leadership to the master-limited partnership in October.

Chevron said it has a two-part agreement to put Noble Midstream in charge of its crude transportation to Platteville, Colorado, where Noble already has storage facilities and access to all the major long-haul pipelines out of Colorado. The deal also includes contracting with Dallas-based Energy Transfer to use its Wattenberg Oil Trunkline to move the crude nearly 40 miles from Briggsdale, Colorado to Platteville.

"This important transaction marks the first business development agreement with Chevron as well as a new commercial partnership with a key midstream provider in the DJ Basin," said Noble Midstream Vice President John Reuwer in a statement.

Noble counts more than 80 miles of shared crude oil and produced water gathering pipelines in the Wells Ranch region.

Chevron closed on its $13 billion deal to acquire Noble Energy in early October and, since the acquisition was first announced, questions have arisen about Chevron's plans for the pipeline spinoff. For now, Chevron is leaning on Noble Midstream for Colorado developments and any potential growth in the region.

Still, Chevron's options for Noble Midstream include continuing to operate it as a master-limited partnership, absorbing it into the Chevron parent, or eventually putting it up for sale -- as many analysts have suggested.