Williams has announced two midstream transactions for $1.173 billion that will result in its entry into Colorado’s Denver-Julesburg Basin.
Williams – a provider of large-scale infrastructure – and KKR plan to buy Discovery DJ Services from TPG Growth. Discovery is a Dallas-based provider of natural gas and oil gathering and natural gas processing services in the southern portion of Colorado’s DJ Basin.
When the acquisition closes, which is expected in early August, Williams and KKR will own the entirety of the Discovery midstream business through a joint venture. Williams will be the operator of Discovery.
Discovery provides midstream services to producers drilling the prolific Niobrara and Codell stacked-pay zones of the basin. The system, strategically located in Weld and Adams countries in Colorado, includes both natural gas and crude oil gathering pipelines, cryogenic gas processing, liquids handling and crude oil storage.
The assets include 60 million cubic feet per day of gas processing capacity with an additional 200 million cubic feet per day plant that is fully permitted and under construction and is expected to be in service by the end of 2018.
The Discovery assets also include 130 miles of natural gas pipeline and 260,000 acres dedicated for gas gathering and processing plus an additional 60,000 acres for oil gathering.
Alan Armstrong, president and CEO of Williams, says: ‘Adding the fast-growing Discovery midstream business, including sites with permitting underway for greater than 1 bcf/d of gas processing to our portfolio, follows our strategy of connecting the best supplies to the best markets.
This is a great opportunity to expand our asset footprint into a premium-growth basin and brings the benefits of the Williams capability suite to better serve producers in the DJ Basin.
‘This transaction allows Williams to take advantage of synergies between the Discovery assets and our downstream business via the DJ Lateral of Overland Pass Pipeline. We will now have the opportunity to integrate output from these acquired assets with production from our existing processing footprint in the west segment into our advantaged downstream assets, including OPPL and the Conway fractionator and storage facilities.’