Epic Midstream Holdings successfully closed its first open season on the Epic Crude Oil Pipeline and has executed definitive agreements to add Diamondback Energy as a strategic partner.
Diamondback will have 50,000 bpd of capacity on the Epic Crude Oil Pipeline, via its subsidiary Rattler Midstream and will also have an option to acquire up to 5% of the equity in the Epic Crude Oil Pipeline, with the option expiring in the first quarter of 2019.
With these commitments, shippers secured 425,000 bpd of capacity, originating from the Permian Basin on the Epic Crude Oil Pipeline. Epic will begin a second open season on Aug. 1, the company said.
Based upon the results of the second open season, Epic will consider upsizing from a 24-inch line to a 30-inch line, expanding its Permian Basin capacity.
“Diamondback’s transportation on and equity option in the Epic Crude Oil Pipeline are important steps as we make progress on our broader long-term takeaway strategy,” said Travis Stice, CEO of Diamondback. “Our agreements secure a firm solution for a majority of our Midland Basin barrels and we are excited to be aligned with some of the Permian’s largest producers on this project.”
Apache and Noble Energy had already committed to anchor the pipeline for 75,000 bpd and 100 bpd of capacity, respectively. At least 10% of the system capacity will be reserved for uncommitted shippers.
The Epic Crude Oil Pipeline, which will run side-by-side with the Epic NGL Pipeline, will extend from Orla, Texas to the Port of Corpus Christi, Texas, and includes terminals in Orla, Pecos, Saragosa, Crane, Wink, Midland, Helena and Gardendale, with Port of Corpus Christi connectivity and export access.
It will service the Delaware, Midland and Eagle Ford Basins. The crude system is expected to be in service in the fourth quarter of 2019.