Established midstream builder, major Permian producer form JV

By Luke Geiver | April 15, 2019

Frontier Midstream Solutions is looking to duplicate previous midstream success in the Permian Basin. The Oklahoma-based entity has signed a deal with Midland, Texas-based Concho Resources to develop a new crude oil, gathering and storage system in the northern portion of the Midland Basin.

Frontier previously developed a major oil gathering, transport and storage system in the Permian that was sold to Plains All-American Pipeline for roughly $1.2 billion. The Alpha Crude Connector is a 500-mile crude oil transmission system with more than 300,000 barrels of crude oil storage capacity that was built to accommodate the soaring oil and gas production in the Permian.

The new project, the Beta Crude Connector, will combine Frontier’s experience with the oil producing capacity and long-term contract of Concho. Frontier and Concho will each own a 50 percent equity interest in the project.

An open season call that started this month could bring the numbers of the pipeline’s capacity to roughly 100-miles of gathering line, 250,000 barrels of crude oil storage and a throughput capacity of 150,000 barrels per day to multiple points.

Jack Harper, Concho president, said the deal with Frontier will help the operator supplant a long-term option for crude takeaway, adding, “this is a compelling investment opportunity that we can make with our capital outlook fully intact and no changes to our operating plan.”

The newly formed midstream joint venture will operate as Beta Crude Connector LLC.

To date, Frontier has completed nearly 20 different major midstream infrastructure projects throughout Texas, Louisiana, New Mexico, Oklahoma, Arkansas and Colorado.