I Squared Capital partnered with Blackstone Energy Partners LP and EagleClaw Midstream Ventures LLC on Nov. 2, making the global infrastructure firm the latest company to join the Permian Highway Pipeline project in the Delaware Basin.

As part of its partnership, I Squared Capital committed more than $500 million cash and became a partner in BCP Raptor Holdco, the parent company for EagleClaw. The firm also contributed its Delaware Basin midstream portfolio company, Pinnacle Midstream, to EagleClaw.

EagleClaw acquisition of Pinnacle included assets located in close proximity to the company’s existing footprint in the Delaware Basin. Pinnacle operated about 100 miles of natural gas and crude gathering pipeline, 30,000 barrels of crude storage facilities, and a 60 million cubic feet per day of natural gas processing facility. Additionally, Pinnacle served several highly active producers, who had committed roughly 35,000 acres for long-term dedication of midstream services.

In addition, EagleClaw said Nov. 2 it completed the $950 million acquisition of Caprock Midstream from Energy Spectrum Capital, which was announced in early September.

EagleClaw CEO Bob Milam said the investment by I Squared Capital and the acquisitions of Caprock and Pinnacle further augment EagleClaw’s position as the leading privately-held midstream operator in the Permian’s Delaware Basin in West Texas.

“The acquisition of Pinnacle, coming on the heels of our recent announcements of the acquisition of Caprock and our partnership on the Permian Highway Pipeline, is another exciting chapter in the continued growth story of EagleClaw,” Milam said in a statement.

Pro forma for the Pinnacle and Caprock acquisitions, EagleClaw operates:

  • Nearly 1,000 miles of natural gas, NGL, crude and water gathering pipelines;
  • Over 1.4 billion cubic feet per day(Bcf/d) of processing capacity (pro forma the completion of one plant currently in construction); and
  • Crude and water storage and disposal facilities.

In addition, EagleClaw now has nearly half a million acres in the core of the southern Delaware Basin under long-term dedication for midstream services.

EagleClaw is also a 50% partner with Kinder Morgan Inc. (NYSE: KMI) on the Permian Highway Pipeline, a roughly $2 billion pipeline project designed to transport up to 2 Bcf/d of natural gas from the Permian Basin to the Katy, Texas area, with connections to the Gulf Coast and Mexico markets.

With the acquisition of Caprock Midstream and Pinnacle Midstream complete, the assets have been integrated into the EagleClaw system and now operate under the EagleClaw brand name.

Jefferies LLC was Blackstone and EagleClaw’s financial adviser in connection with the transactions. Akin Gump provided legal counsel on the acquisition of Caprock, and Vinson & Elkins was legal counsel on the acquisition of Pinnacle Midstream and partnership with I Squared Capital. Goldman Sachs and Greenhill were financial advisers to I Squared Capital, and Sidley Austin was the firm’s legal counsel.

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