Western Midstream Partners, LP, Enbridge Inc., and Plains All American Pipeline, L.P. and Plains GP Holdings, announced that some of their subsidiaries closed a transaction whereby Enbridge and Plains purchased WES’s 15% interest in Cactus II pipeline, LLC for an aggregate amount of $265 million.
Enbridge acquired 10% and Plains acquired 5% of Cactus II, with each paying a proportionate share of the purchase price. Plains and Enbridge are now the sole owners of Cactus II, with 70% and 30% respective ownership interests. Plains will continue to serve as operator.
The Cactus II pipeline is a 26-inch diameter, 670,000 barrel-per-day oil pipeline that extends from the Delaware basin in West Texas to Corpus Christi, with further connectivity to the Ingleside area. Cactus II, in combination with Enbridge’s Ingleside Energy Center, provides a premier and industry-leading solution to deliver abundant, responsibly produced North American energy supplies to the U.S. Gulf Coast (USGC) and global markets.
“We are pleased to announce the divestiture of our interest in Cactus II to our former operating partners, Plains and Enbridge. This transaction demonstrates our disciplined approach in evaluating our portfolio, focusing on our core gathering and processing businesses in the Delaware and DJ Basins, and returning value to our unitholders,” stated Michael Ure, Chief Executive Officer of Western.
“Today’s announcement is another important step in advancing our USGC strategy to connect growing Permian production to global export markets,” said Colin Gruending, President Liquids Pipelines and Executive Vice President of Enbridge Inc. “The Cactus II pipeline specifically adds to our advantaged light oil integrated value chain providing low-cost access to the best markets for our shippers.”
“We’re pleased to reach this agreement with Western Midstream and further strengthen our relationship with Enbridge,” said Willie Chiang, Plains’ Chairman and Chief Executive Officer. “This is another example of our continued focus on optimizing our portfolio and creating mutually beneficial transactions for all involved. We appreciate Western’s partnership over the years and look forward to continuing to work with Enbridge.”
