Plains agrees to buy Powder River Basin assets for $585 million

Plains ($PAA) agreed to acquire Silver Creek’s Powder River Basin crude-oil infrastructure for $585 million in cash. The package includes approximately 600 miles of pipelines, 1.2 million barrels of storage and a 49% non-operated interest in the Powder River Gateway joint venture. The assets have around 350,000 barrels per day of operating capacity.

Current throughput is approximately 125,000 barrels per day, so capacity should not be confused with actual volumes. The system is supported by roughly 915,000 dedicated acres and contracts with a weighted-average remaining term exceeding eight years. Plains expects to close in the fourth quarter, subject to antitrust clearance and other customary conditions. The transaction expands its gathering and logistics footprint, but the purchase and its future earnings contribution remain pending.

Sources:

• Plains — Silver Creek transaction announcement