HOUSTON (AP) -- Crestwood Midstream Partners LP is buying a 50 percent stake in Jackalope Gas Gathering Services LLC from RKI Exploration & Production LLC for approximately $108 million.
Jackalope's gathering and processing system is located in Wyoming, giving Crestwood access to the emerging Powder River Basin Niobrara Shale play. The system includes about 100 miles of gathering pipelines and 9,400 horsepower of compression equipment with near-term plans to install a new gas processing facility and continued expansion of the gas gathering system.
RKI is a privately-owned, independent exploration and production company focused in the Powder River, Permian and Denver-Julesberg Basins in which First Reserve owns a significant minority ownership interest.
First Reserve is an energy-focused private equity firm that is also Crestwood's indirect general partner and largest common unit holder.
Access Midstream Partners LP owns the remaining 50 percent stake in Jackalope. Access Midstream, which bought its interest in Jackalope from Chesapeake Energy Corp. in December, will continue to provide field operations and construction management for Jackalope. Houston's Crestwood will handle the commercial development role for the joint venture.
The acquisition is expected to close in the third quarter.