Hundreds of miles separate the Permian Basin from the U.S. Gulf Coast, but in the Shale Era traversing that span has become increasingly important to Permian producers. Billions of dollars have been invested to expand capacity to move Permian production — crude, natural gas or NGLs — to the Gulf Coast to take advantage of surging export markets. In today’s RBN blog, we’ll focus our attention on EPIC Midstream and its EPIC Crude Pipeline, which has operated above its nameplate capacity for much of this year.
Before we jump into the details, it’s helpful to understand EPIC Crude’s ownership and anchor shippers (at least those that have been made public). Initially, EPIC Crude was supported by capital commitments from funds managed by private equity group Ares Management (45%), with additional equity from Noble Midstream Partners (30%), Altus Midstream (15%, a midstream company formed between Apache and Kayne Anderson Acquisition Corp.) and Diamondback Energy (10%). Apache and Noble (the latter acquired by Chevron in 2020) were the first to commit as anchor shippers in May 2018, securing 75 Mb/d and 100 Mb/d of firm capacity, respectively. At that time, more than 500,000 acres were dedicated to the pipe, with Apache and Noble among the key contributors. Following an extended open season, Diamondback (50 Mb/d) and other unnamed parties (200 Mb/d) joined, bringing total commitments to 425 Mb/d and prompting EPIC to upsize the pipeline’s diameter from 24 to 30 inches with a 600-Mb/d capacity.
Now, Diamondback and pure-play Permian midstream company Kinetik Holdings (formed in 2022 by the merger of Altus Midstream and the corporate parent of EagleClaw Midstream) together have acquired an additional 30% equity interest in the EPIC Crude pipeline system. With the deal, the companies now each own 27.5% of EPIC Crude, an affiliate of the parent company EPIC Midstream, which will continue to own a 45% stake and remain the operator of the pipeline.
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