Apache Corp. (NYSE: APA) continued the infrastructure buildout of its Alpine High development area in the Permian's Delaware Basin with an agreement May 14 to build a new NGL project.

The NGL project will consist of a 445,000 barrel-per-day capacity NGL header system named SCM Alpine LLC, which will be developed by Apache Midstream, ARM Energy Holdings LLC and its affiliate, Salt Creek Midstream LLC.

As part of the agreement, ARM will construct, manage, operate and own an interest in the Alpine header system. Additionally, Apache Midstream signed an option to acquire a 50% stake in the system. The terms of the transaction weren't disclosed.

The project is set to cost $100 million to construct and will comprise two pipeline segments that originate at both the Salt Creek and Apache processing facilities in southern Reeves County, Texas.

Apache expects the pipeline will provide flexibility by transporting NGL to Waha, where it will have the ability to interconnect to downstream pipelines providing access to Mont Belvieu and Corpus Christi fractionation facilities in Texas.

“The development of this NGL project is another significant step in Apache’s Alpine High infrastructure buildout,” Brian Freed, Apache’s senior Vice president of midstream and marketing, said in a statement. “This project provides Apache access to the emerging Waha market area, increasing the company’s long-term operational flexibility and market optionality.”

The Alpine header system is supported by 10-year commitments from both Salt Creek and Apache. The term of the commitments may be automatically extended twice for an additional five years for a potential term of 20 years, according to the company press release.

Construction of the project has commenced and the companies expect the Alpine header system to be operational in first-quarter 2019.

Salt Creek and Alpine are both owned by funds managed by the Ares Private Equity Group and ARM Energy.

In April, Ares Management LP (NYSE: ARES) and ARM Energy formed Salt Creek as part of a joint venture agreement to develop a pure-play Delaware Basin midstream company.

ARM Energy’s CEO Zach Lee said in a statement, “We are pleased to join Apache in announcing this project. This announcement signifies Salt Creek’s extensive relationships in the Delaware Basin and our expanding world-class asset-base. We have a deep understanding of the fundamentals driving upstream and midstream economics and their impact on the gulf coast downstream markets. We believe Alpine is well-positioned to provide market optionality leading to netback advantages for its customer base.”

Locke Lorde LLP provided legal representation to ARM Energy/Salt Creek and Bracewell LLC represented Apache.