Plains All American (PAA) has entered an agreement to purchase SCM Crude II LLC, a subsidiary of Silver Creek Midstream, for $585MM in cash, gaining a new foothold in the Powder River Basin.
The deal announced last Wednesday (Sept. 16) includes Silver Creek Midstream’s 49% non-operated interest in the Powder River Gateway system (consisting of the Powder River Express and Iron Horse pipelines), plus full ownership in the gathering system that directly feeds Powder River Gateway. The assets include 600 miles of crude gathering and transmission lines with 350 Mb/d of capacity, plus 1.2 MMbbl of storage.
Powder River Gateway has been in the news recently. Enbridge (ENB) purchased the other 51% operating interest in the asset from Tallgrass Energy earlier this month, along with Tallgrass’ 75% interest in Pony Express.
The Silver Creek deal gives Plains control of a large share of the barrels that move on Pony Express. The Powder River Crude Services Gathering system connects into Powder River Gateway, which feeds 40% of the throughput on Pony Express received in Guernsey, according to FERC filings tracked by East Daley. Plains will fully control the crude gathering system, plus 49% of Powder River Gateway.
The acquisition could pose a risk to some Pony Express volumes. Plains has an alternative route to Cushing through the Cheyenne, Cowboy, Saddlehorn and White Cliffs pipelines. Cheyenne has 95 Mb/d of capacity and averaged ~60 Mb/d of throughput in 2Q26, but those barrels ultimately flow onto Cowboy, which has 75 Mb/d of capacity. In theory, that leaves Plains with ~15 Mb/d of incremental room to redirect volumes away from Pony Express and through the Cheyenne-Cowboy route.
Plains Pays Up for Powder River Position
Plains appears to have paid a premium for Silver Creek. The trailing 12-month EBITDA on Powder River Gateway and the crude gathering system, as reported to FERC, is ~$30MM net to PAA’s interest. At a $585MM price, we estimate PAA paid 19.2x earnings for the two assets.
East Daley forecasts 2027 EBITDA for the systems at ~$32.95MM, bringing the multiple down to a still high 17.75x on forward earnings. PAA seems to be anticipating faster growth in the Powder River than is currently reflected in our models, or potential synergies (such as diverting barrels off Pony Express) that will sweeten the value. Holding all else equal, if the combined systems flowed 160 Mb/d in 2027 (a 65% increase from the most recent FERC-reported throughout), the transaction multiple would decline to a more reasonable 10.6x EBITDA.
The acquisition provides Plains with partial control over volumes for a key egress pipeline, and positions PAA as a major gatherer in an attractive basin. – London Spivey, CFA and Keland Rumsey Tickers: ENB, PAA.
Can Crude and NGL Markets Keep Pace with the US LNG Boom?
Rising US LNG feedgas demand has the potential to float all boats — but only if crude oil and NGL markets can support the growth.
Reaching nearly 26 Bcf/d of LNG feedgas demand by the end of 2027 will require producers to drill aggressively across the Permian, Haynesville and Northeast. In the Permian especially, that growth depends on steadier crude prices, to give producers the confidence to commit capital, subscribe to new pipeline capacity and fill the infrastructure midstream companies must build.
Join East Daley Analytics on Wednesday, Sept. 30 as we examine the cross-commodity conditions required to keep the LNG growth story on track:
- What crude price environment will support sustained drilling and pipeline investment?
- Could Permian crude constraints limit associated gas production?
- Where could NGL processing, takeaway and export bottlenecks emerge?
- Which companies are best positioned to capitalize?
LNG demand may be the rising tide — but crude and NGL markets will determine whether all boats can rise with it.
Join East Daley Analytics on Sept. 30 at 10:00 am MT for a discussion at the intersection of energy. Click here to reserve your spot today.
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