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Altus Midstream closes purchase of stake in $2.1B Permian Highway pipeline

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Altus Midstream closes purchase of stake in $2.1B Permian Highway pipeline

Altus Midstream Co. subsidiary Altus Midstream Processing LP closed its acquisition of a roughly 26.7% stake in the Kinder Morgan Inc.-led Permian Highway natural gas pipeline for about $161 million.

Following the deal completion, Altus Midstream Processing, Kinder Morgan and Blackstone Energy Partners portfolio company EagleClaw Midstream Ventures LLC each hold a 26.7% interest in the pipeline, while Exxon Mobil Corp. affiliate ExxonMobil Permian Highway Pipeline LLC owns the remaining 20%.

The deal involves Altus Midstream exercising its option to acquire the stake in the pipeline. "[The deal] amount includes Altus' proportional share of capital spent by its [joint venture] partners prior to the option exercise and a financing charge associated with the cost of this capital spent prior to Altus' option exercise," Altus CEO, President and Director David Clay Bretches said in a May 29 news release.

The estimated $2.1 billion Permian Highway project is designed to transport approximately 2.1 Bcf/d of Permian Basin-produced natural gas from the Waha hub to the Gulf Coast and other markets. Permian Highway is scheduled to begin service in October 2020.

Altus owns substantially all of the gas gathering, processing and transportation assets serving its parent Apache Corp.'s production in the Alpine High play in the Delaware Basin.