Crestwood Midstream Partners LP (NYSE: CMLP) has completed the previously announced acquisition of midstream assets in the Fayetteville Shale and the Granite Wash plays from Tulsa, Oklahoma based Frontier Gas Services, LLC for approximately $338 million cash paid at closing.

"We are pleased to complete this important acquisition of high quality, midstream assets which are located in two of the nation’s premier natural gas and natural gas liquids shale plays," said Robert G. Phillips, president and chief executive of Crestwood LP’s general partner. "This deal, coming on the heels of our October 2010 acquisition of Barnett Shale midstream assets in North Texas, is evidence of our long term strategy to expand Crestwood LP’s geographic and operating footprint and diversify the Partnership’s customer portfolio to include some of the leading producers in the shale or unconventional resource development business."

The acquired assets in the Fayetteville Shale, located in Northwest Arkansas, consist of approximately 127 miles of gathering pipelines with a capacity of approximately 510 million cubic feet per day (MMcf/d), treating capacity of approximately 165 MMcf/d and approximately 35,000 hp of compression serving dedicated acreage and natural gas production currently under contracts with BHP Billiton Petroleum, BP America and ExxonMobil’s XTO subsidiary. The Granite Wash assets, located in the Texas Panhandle, include a 28 mile natural gas and natural gas liquids pipeline system and a 36 MMcf/d cryogenic processing plant serving dedicated acreage and natural gas production currently under contracts with Chesapeake Energy and Linn Energy. Crestwood LP plans to install a second processing plant with approximately 60 MMcf/d of additional capacity with plans to be in service by the end of 2011 to support expected growth in volumes from the emerging Granite Wash play.

"The Fayetteville Shale, like the Barnett Shale, is considered to be a “world-class” natural gas resource play and the Granite Wash is a fast-emerging shale play driven by significant natural gas liquids production," added Phillips. "Both of these new areas should provide Crestwood with solid near-term growth and numerous organic expansion opportunities in the future due to long-term acreage dedications associated with the producer contracts under the Frontier acquisition. Importantly, the Frontier assets fit well with our existing asset base and will be quickly integrated into Crestwood LP’s Barnett Shale operations during the second quarter of 2011."