Houston’s Ares Management LP and ARM Energy Holdings LLC are moving forward in their plans to develop Salt Creek Midstream LLC in the Delaware Basin.

Salt Creek was formed last year as a joint venture between the two companies as a full service midstream provider offering gas and crude gathering services, compression, cryogenic processing and treating services. A greenfield development project, Salt Creek spans Culberson, Pecos, Reeves, Ward and Winkler counties in Texas and Lea and Eddy counties in New Mexico. ARM Midstream, a subsidiary of ARM Energy, will operate the project.

“Salt Creek Midstream is currently a pure play Permian midstream company,” Michael Christopher, chief financial officer with ARM Energy, told the Reporter-Telegram by email.

The first phase of the project is expected to be commissioned this month and Christopher told the Reporter-Telegram Salt Creek should have 260 million cubic feet per day of processing capacity well before the end of the year. The system will primarily be comprised of multiple cryogenic processing facilities as well as crude and natural gas gathering pipelines, compression and treating facilities.

Commitments for over 250,000 dedicated acres from multiple producers active in the Delaware Basin have been secured.

“The current acreage dedications indicate the strength of various levers, one of which is takeaway, but certainly multi-stream capability as well as downstream connectivity and intelligence,” stated Christopher. Salt Creek officials expect the strength of the Delaware will provide decades of high-return drilling inventory, which drill drive future growth for the company.

Given the billions of dollars being directed towards midstream infrastructure, Christopher was asked if it’s easier for midstream companies to get financial backing compared to upstream exploration and production companies.

“The answer is nuanced,” he replied. “Exploration and production companies with great acreage in the Delaware, SCOOP/Stack or Denver-Julesburg may find it reasonably painless to secure financing. ARM – Salt Creek’s operator and one of its owners – has a track record of midstream success. That track record made financial backing less challenging to secure. That, plus Ares’ own experience in the Basin and ARM’s relationship with ARES, made the financing equation simpler to solve.”