ArcLight and Rattler Form 50/50 Midstream Joint Venture

Source Press Release
Company ArcLight Capital Partners, LLCRattler Midstream LP 
Tags Asset Deals, Deals, LNG & Gas Storage/Processing, Pipelines/ tankers/ distribution
Date February 20, 2020

The new entity, Amarillo Rattler, will focus on owning and operating natural gas gathering and processing assets in the Midland Basin of the Permian

ArcLight Capital Partners and Rattler Midstream, a subsidiary of Diamondback Energy, announced today that Amarillo Midstream, an ArcLight Fund V portfolio company, and an affiliate of Rattler have entered into a 50/50 joint venture to own, operate and expand a natural gas gathering and processing system in the Midland Basin.

The new entity, Amarillo Rattler, is owned 50% by Amarillo Midstream and 50% by an affiliate of Rattler. The joint venture currently owns and operates the Yellow Rose gas gathering and processing system with estimated total processing capacity of 40,000 Mcf/d and over 84 miles of gathering and regional transportation pipelines in Dawson, Martin, and Andrews Counties, Texas.

This joint venture also intends to construct and operate a new 60,000 Mcf/d natural gas cryogenic processing plant in Martin County, Texas, as well as incremental gas gathering and regional transportation pipelines.   

Amarillo Rattler anticipates that the new processing plant will commence full commercial operations in mid-2021. Diamondback has contracted for a portion of the new processing plant's capacity, which is well-positioned for future expansion, pursuant to a gas gathering and processing agreement entered into with the joint venture in exchange for Diamondback's dedication of certain leasehold interests to that agreement.

"We are very pleased to partner with Rattler on this exciting new natural gas focused midstream JV in the Midland Basin," said Dan Revers, Managing Partner and Founder of ArcLight. "Capturing and efficiently processing natural gas in the Permian Basin is a key part of the U.S. energy transition and we look forward to supporting Diamondback in these efforts. We look forward to growing the joint venture and our relationships with Rattler and Diamondback in the years to come.""

We are excited to partner with ArcLight and Amarillo Midstream in expanding this gas gathering and processing system in one of our core growth areas for years to come. Enhanced planning and coordination between our gas gathering and processing partners in this venture, and across all of our operations, increases the capital efficiency and reliability of the integrated systems and minimizes increasingly undesirable outcomes such as flaring," stated Travis Stice, Chief Executive Officer of Rattler's general partner. "Moreover, this joint venture demonstrates Rattler's ability to leverage the Diamondback relationship to invest in attractive projects that ensure its high operational and environmental standards are met downstream of the wellhead."

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd