Crestwood Partners Expands in Bakken, Permian with $1.86 Billion in Active Projects

Researched by Industrial Info Resources (Sugar Land, Texas)--Crestwood Equity Partners LP (NYSE:CEQP) (Houston, Texas) is notching up a series of growth projects in two of North America's most prosperous places: the Bakken Shale and the Permian Basin. Largely financed through the sale of a major salt business, Crestwood's expansions in the two shale plays are expected to pay off in the years to come. Industrial Info is tracking $1.86 billion in active projects involving Crestwood Equity and its subsidiaries.

Crestwood made significant strides during the quarter in the Delaware Basin, which is part of Texas' Permian Basin, through Crestwood Permian Basin Holdings LLC, a 50:50 joint venture between Crestwood and First Reserve Corporation (Greenwich, Connecticut). Crestwood completed site preparations and soon will begin construction on a $150 million cryogenic natural gas-processing plant in Orla, Texas.

The 200 million-standard-cubic-foot-per-day plant will be serviced by a $24 million main line, also set to begin construction soon. It will run 16 miles and connect with a separate line that terminates at the existing Willow Lake gathering system in Eddy County, New Mexico. For more information, see Industrial Info's project reports on the processing plant and main line.

In North Dakota's bustling Bakken Shale, Crestwood has three projects under construction in Watford City: the $100 million Bear Den Cryogenic Natural Gas Processing Plant, which is set to wrap up in the fourth quarter, will have a processing capacity of 30 million standard cubic feet per day; the $6.3 million residue natural gas and NGL pipelines will run 2.6 miles to Targa Resources Corporation's (NYSE:TRGP) (Houston) Little Missouri Natural Gas Processing Plant, also in Watford City; and a $15 million compressor and NGL pump station will support the twin lines. For more information, see Industrial Info's project reports on the plant, pipelines and pump station.

The company also is weighing a second train at the facility, which would process an additional 170 million standard cubic feet per day, but is unlikely to make a decision soon. For more information, see Industrial Info's project report.

During the third quarter, Crestwood invested about $35.9 million in expanding its natural gas- and water-handling capabilities on its Bakken system and in construction of the Bear Den plant. The system saw volume increases of 58% for crude oil, 8% for natural gas and 38% for water when compared with volumes in third-quarter 2016.

As part of its effort to focus on its high-growth assets, Crestwood announced it is selling off US Salt LLC, a non-core-business, for $225 million to Kissner Group Holdings LP (Toronto, Ontario), the parent company of Kissner, a bulk salt and specialty packaged salt producer. Crestwood executives said they plan to reinvest the proceeds into its holdings in the Bakken Shale and Delaware Basin through the end of 2018. For information on US Salt's mine and refinery in Watkins Glen, New York, which produces 400,000 tons of evaporated salt annually, see Industrial Info's plant profile.

Crestwood's revenues stood at $955.6 million for the quarter, a 62.6% increase from third-quarter 2016; however, heavier costs for gathering, processing and marketing led to a net loss of $50.5 million, compared with a loss of $10 million in the same period last year.

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