Noble Midstream Partners LP recently announced that it has exercised and closed its option with EPIC Midstream Holdings, LP (EPIC) to acquire a 15% equity interest in the EPIC Y-Grade Pipeline. In addition, Noble Energy, Inc. (NBL) has assigned Noble Midstream its option to acquire a 30% equity interest in the EPIC Crude Oil Pipeline and Noble Midstream has exercised its option with EPIC. Closing of the Partnership’s equity interest in the EPIC Crude Oil Pipeline is anticipated in February 2019 and subject to certain conditions precedent.
Both pipelines are anticipated to be funded through project level debt as well as equity commitments from project partners. Noble Midstream’s total cash equity investment is anticipated to be approximately USD 165 to USD 180M for the EPIC Y-Grade Pipeline and USD 330 to USD 350M for the EPIC Crude Oil Pipeline. Included in these amounts, a USD 109M catch-up payment for the EPIC Y-Grade Pipeline was contributed at close and approximately USD 100 to USD 110M is anticipated to be paid for the EPIC Crude Oil Pipeline at close. Noble Midstream intends to fund its equity investment with its revolving credit facility and is exploring a private co-investment in the EPIC Crude Oil Pipeline.
The Partnership anticipates significant value creation for unit holders from the EPIC Crude Oil Pipeline and EPIC Y-Grade Pipeline Projects. Participation in these ventures reinforces the Partnership’s target of 50% Permian EBITDA contribution by the end of 2020. Both investments are expected to have robust economics, with returns and build multiples that compete with the very best opportunities in the Partnership’s portfolio.