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Apache affiliate to develop $100M NGL header system in Texas

Apache Corp. unit Apache Midstream signed an option to acquire a 50% stake in SCM Alpine LLC, a $100 million, 445,000-barrel-per-day NGL header system in Texas being developed by ARM Energy Holdings LLC affiliate Salt Creek Midstream LLC.

The system would include two pipeline segments to deliver NGLs from the Salt Creek and Apache processing facilities in southern Reeves County, Texas, to the Waha Hub in West Texas, according to a May 14 news release. From Waha, the system may interconnect with downstream pipelines for access to fractionation plants in Mont Belvieu and Corpus Christi, Texas.

Arm Midstream Management LLC, another affiliate of ARM Energy, would be in charge of constructing, managing and operating the system. The project is also underpinned by 10-year commitments from Salt Creek and Apache. The commitment terms are extendable twice for five years, resulting in a potential 20-year term.

Construction on the project has commenced and it is scheduled to start operations in the first quarter of 2019.

The development of the NGL project is another significant step in Apache's Alpine High play infrastructure buildout, Apache Senior Vice President of Midstream and Marketing Brian Freed said.

ARM Energy in April partnered with asset manager Ares Management LP to develop Salt Creek, whose operations are focused in the Delaware Basin. Salt Creek offers gas and crude gathering, compression, processing and other midstream services.

Locke Lorde LLP served as ARM Energy and Salt Creek's legal representative, while Bracewell LLC represented Apache in the deal.