Enterprise buys $3B of Permian Basin natural gas assets from Navitas

Enterprise Products announced its acquisition of Navitas Midstream Partners Monday for $3.25 billion, purchasing about 1,750 miles of pipelines and up to a billion cubic feet per day of natural gas processing capacity in the Midland sub-Basin on the eastern side of the Permian in Texas.

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The added capacity included completion of the Leiker Plant, expected in early 2022, with an expected capacity of 240 million cubic feet per day.

In buying Navitas’ assets, Enterprise hoped to enter the prolific Permian Basin, one of the U.S.’ most active oil and gas fields. The Midland Basin, per an Enterprise news release, represents about 20 percent of U.S. onshore drilling.

Enterprise is already active in the Delaware Basin on the western side of the Permian, operating multiple facilities in southeast New Mexico and West Texas.

The Navitas system was supported by long-term contracts and acreage dedications from more than 40 producers, the release read.

Following the sale, Enterprise hoped to increase its visibility by servicing up to 10,000 drilling locations in the next 15 years, extracting crude oil, natural gas and natural gas liquids (NGL).

“The Navitas management team has developed a premier system in the heart of the Midland Basin. The Delaware and Midland Basins are the two most attractive regions in the U.S. in terms of crude oil, natural gas and NGL reserves with each having up to nine geologic horizons,” said A.J. Teague, Enterprise co-chief executive officer.

“We do not have a natural gas or NGL presence in the Midland Basin other than downstream pipelines. This acquisition will give us an entry point into the basin.”

Randy Fowler, co-CEO of Enterprise said the move would augment the company’s existing operations in the region to include both of the Permian’s sub-basins and lead to future growth.

“The system, including its large footprint of low pressure natural gas gathering, is an attractive processing franchise that provides value added services to producers,” Fowler said. “This investment will provide Enterprise with an attractive return on capital and support additional capital returns to our limited partners through distribution growth and buybacks of common units.”

And as more natural gas is extracted and processed in the Permian Basin, Lucid Energy hoped to reduce the environmental impact of such operations, announcing Tuesday it received approval from the U.S. Environmental Protection Agency for a carbon sequester project in Lea County.

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