Plains to Acquire 55% Stake in EPIC Crude Pipeline for $1.57 Billion
Plains All American Pipeline, L.P. and Plains GP Holdings (collectively referred to as “Plains”) announced Tuesday that it has entered into a definitive agreement through a wholly-owned subsidiary to acquire a 55% non-operated interest in the EPIC Crude Oil Pipeline.
The deal, valued at approximately $1.57 billion, including about $600 million of debt, will allow Plains to acquire a majority interest in subsidiaries of Diamondback Energy, Inc. and Kinetik Holdings Inc.
Plains Chairman, CEO, and President Willie Chiang said the deal complements the company's current asset footprint, strengthens their position as the premier crude oil midstream provider, and enhances its customer offerings.
“The combination of our stake in EPIC Crude Holdings, coupled with our existing integrated Permian and Eagle Ford assets, enhances our commitment to offering a high level of connectivity and flexibility for our customers,” said Chiang.
The EPIC Pipeline spans about 800 miles (about 1,287 kilometres) and has an operating capacity of more than 600,000 barrels per day. The pipeline system also includes around 7 million barrels of operational storage and over 200,000 barrels per day of export capacity.
As part of the deal, Plains has also agreed to a potential $193 million earnout payment if the pipeline's capacity is formally expanded to at least 900,000 barrels per day by the end of 2027.
The acquisition deal, expected to close in early 2026 pending regulatory approval, strengthens Plains' position in the Permian and Eagle Ford basins by linking its existing assets to the Gulf Coast market in Corpus Christi, Texas.
The remaining 45% interest in EPIC Crude Holdings is held by an Ares Management Corporation portfolio company, which also serves as the operator.
Plains expects the transaction to be immediately accretive to distributable cash flow and lead to synergistic opportunities that will result in "mid-teens unlevered returns." The company plans to finance the acquisition using cash and debt while maintaining its target leverage ratio.