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40 Miles from Denver, Part 4 - PE-Backed ARB Midstream's D-J Basin Crude Gathering Systems

Private equity is playing a critically important role in the build-out of crude oil gathering systems in the Denver-Julesburg (D-J) Basin, where rising production volumes — and the expectation of further growth, especially in and around Weld County, CO — are spurring a number of major projects. For proof, you need look no further than ARB Midstream, which, with backing from Ball Ventures’ BV Natural Resources, has developed the largest privately held crude transportation and storage network in the D-J through a combination of acquisitions and new construction. Producers have dedicated a quarter of a million acres to it. Today, we continue a series on crude-related infrastructure in the D-J with a look at ARB Midstream’s fast-expanding asset base there.

Midstreamers supported by private equity have been the focus of two of the three blogs on D-J crude gathering systems we’ve already posted. In Part 1, we discussed the sprawling Black Diamond crude gathering system in Weld County that is co-owned by publicly traded Noble Midstream Partners and PE-backed Greenfield Midstream, which was established in 2017 with financial backing from EnCap Flatrock Midstream. Part 2 reviewed Noble Midstream’s nearby Wells Ranch, East Pony, Greeley Crescent and Mustang systems, and Part 3 considered the crude transportation network now being expanded by Denver-based Taproot Energy Partners, a year-and-a-half-old company with financial backing from Energy Spectrum Partners.

Before we delve into ARB Midstream’s extensive pipe and storage holdings in the D-J Basin, we’ll provide a brief reminder that the D-J area in northeastern Colorado and southeastern Wyoming offers an unusually intense concentration of hydrocarbons within four geologic layers, or “benches,” only a few thousand feet below the surface, as well as low per-well drilling costs and direct pipeline access to the crude oil hub in Cushing, OK. We also should point out that D-J crude production has doubled in the past 18 months to almost 650 Mb/d, and that the vast majority of the basin’s production growth has been occurring in Weld County, making it the epicenter of midstream development activity as well.

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