Units of midstream master limited partnership Noble Midstream Partners (NYSE: NBLX) jumped as much as 17% when the trading day began on July 20. By roughly 10:30 a.m. Wall Street time, it was still hanging on to most of those gains, up around 14%. There was no news out of Noble Midstream, but there was big news out of Chevron (NYSE: CVX) that could end up changing Noble Midstream's long-term outlook.
Noble Midstream is a partnership created by Noble Energy (NASDAQ: NBL) to own and operate midstream energy assets, specifically pipelines. Noble Energy is the general partner, meaning it runs the partnership, and has a roughly 45% interest in Noble Midstream. All of this is relevant today because Noble Midstream's long-term growth is tied to the prospects for Noble Energy and the assets that the energy company is likely to sell to it (known as a dropdown in the industry). Specifically, Noble Midstream has the right of first refusal (ROFR) for five of Noble Energy's midstream assets.
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