Plains All American Pipeline and Plains GP Holdings have agreed to acquire Silver Creek Midstream’s Powder River Basin crude oil gathering assets for approximately $585 million in cash, expanding Plains’ Rockies infrastructure and strengthening its direct connectivity to producer supply.
A wholly owned Plains subsidiary entered into a definitive agreement to acquire SCM PR II, LLC, or Silver Creek, from subsidiaries of Tailwater Capital and The Energy & Minerals Group. The transaction is expected to close in the fourth quarter of 2026, subject to customary conditions and clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
Silver Creek owns and operates one of the largest integrated crude oil gathering systems in the Powder River Basin and serves a diversified group of producers.
The system connects customers with Plains’ existing Rockies infrastructure through the Guernsey and Fort Laramie hubs, strengthening the company’s ability to gather crude oil closer to the wellhead and move it through its broader transportation network.
The acquired assets include approximately 600 miles of crude oil gathering and transmission pipelines, more than 350,000 barrels per day of operating capacity and approximately 1.2 million barrels of operational storage capacity.
Plains will also acquire a 49% non-operated interest in the Powder River Gateway joint venture, which includes Iron Horse and Powder River Express.
The transaction substantially increases Plains’ exposure to the Powder River Basin, an area where the company sees a long runway for continued development.
Plains said the acquired system is supported by more than 20 years of remaining drilling locations at current activity levels, with continued production growth expected over the next several years.
The acquisition also creates additional connectivity between upstream gathering systems and Plains’ long-haul crude oil infrastructure.
Silver Creek’s assets will provide producers with access to Plains’ transportation network, including routes capable of moving crude oil volumes toward Cushing, Oklahoma, one of the most important crude oil trading and storage hubs in the United States.
The underlying commercial agreements provide Plains with additional visibility into future cash flow.
The system includes approximately 915,000 dedicated acres covered by long-term acreage dedications and minimum volume commitments, with a weighted-average contract tenor exceeding eight years.
Current throughput across the system is approximately 125,000 barrels per day.
Plains believes integrating the Silver Creek assets into its existing Rockies platform can create both commercial and operational synergies while contributing to long-term earnings and cash flow growth.
The deal also reflects Plains’ broader strategy of investing in infrastructure that increases direct access to producer volumes while improving utilization of existing downstream assets.
Rather than acquiring a standalone system with limited integration opportunities, Plains is purchasing gathering and transmission infrastructure that feeds into hubs and long-haul assets it already operates.
That can potentially increase the economic value of each barrel moving through the system because Plains may participate in multiple stages of the transportation chain.
The Powder River Basin has become an increasingly important source of crude oil production in the Rockies, and Plains sees remaining drilling inventory as supporting additional long-term demand for gathering and transportation infrastructure.
The transaction also comes as Plains adjusts its capital structure.
Management pointed to its recently announced junior subordinated notes offering and planned retirement of Series A and Series B preferred units as providing additional balance-sheet flexibility heading into 2027.
Mizuho is serving as financial advisor to Plains, while Latham & Watkins is acting as legal counsel.
Plains All American is one of North America’s largest crude oil infrastructure and logistics businesses, operating pipeline gathering and transportation systems, terminals, storage assets and other infrastructure across major producing basins and market hubs in the U.S. and Canada.
The $585 million Silver Creek acquisition deepens that network in the Powder River Basin while giving Plains additional contracted volumes, storage capacity and direct producer relationships within a region the company expects to continue growing.
KEY QUOTES:
“Silver Creek represents a highly strategic addition to Plains’ Rockies platform. The acquisition is in line with our internal rate of return thresholds of 300 to 500 basis points above our cost of capital and expands our footprint in the Powder River Basin, a region supported by substantial remaining drilling inventory and an attractive outlook for continued producer development over the coming years.”
Willie Chiang, Chairman, CEO and President of Plains
