Investments	9 Months Ended
Sep. 30, 2016
Investments
Investments	10. INVESTMENTS On July 5, 2016, the Partnership purchased a 50% membership interest in Carnero Gathering from SN Midstream for an initial payment of approximately $37.0 million and the assumption of remaining capital commitments to Carnero Gathering, estimated at approximately $7.4 million as of the date of the acquisition. The membership interests acquired constitute 50% of the outstanding membership interests in Carnero Gathering. The remaining 50% membership interests of Carnero Gathering are owned by an affiliate of Targa Resources Corp. (“Targa”). During the third quarter 2016, the Partnership made approximately $3.0 million of capital contributions to the joint venture. Prior to the sale, SN Midstream had invested approximately $26.0 million in the Carnero Gathering joint venture. The fair value of the intangible asset for the contractual customer relationship related to Carnero Gathering was valued at approximately $13 million. This amount will be amortized over the contract term of fifteen years and decrease earnings from the Carnero Gathering. As part of the Carnero Gathering Transaction, the Partnership is required to pay SN Midstream a monthly earnout based upon gas received at Carnero Gathering’s receipt points from SN Catarina and gas delivered by other producers and processing by Carnero Processing, which will begin in 2017. This earnout is considered as contingent consideration and its estimated fair value of $4.3 million was recorded on the balance sheet as a deferred liability as of September 30, 2016. As of September 30, 2016, the Partnership has paid approximately $40.0 million for the Carnero Gathering Transaction related to the initial payment and contributed capital. The Partnership has accounted for this investment as an equity method investment. Targa is the operator of the joint venture and has significant influence with respect to the normal day-to-day construction and operating decisions. We have included the investment balance in the “Equity investment” caption in our Condensed Consolidated Balance Sheet. The Partnership recorded earnings of approximately $1.3 million in equity investments from Carnero Gathering, which was offset by $0.2 million related to the amortization of the contractual customer intangible asset for both three and nine months ended September 30, 2016. We have included these equity method earnings in the “Earnings from equity investments” line within the Condensed Consolidated Statement of Operations. On October 6, 2016, the Partnership announced a definitive agreement to purchase 50% of the membership interests of, and any remaining commitment to invest in, Carnero Processing from SN Midstream (see further discussion in Note 18, “Subsequent Events”).

10. INVESTMENTS

On July 5, 2016, the Partnership purchased a 50% membership interest in Carnero Gathering from SN Midstream for an initial payment of approximately $37.0 million and the assumption of remaining capital commitments to Carnero Gathering, estimated at approximately $7.4 million as of the date of the acquisition. The membership interests acquired constitute 50% of the outstanding membership interests in Carnero Gathering. The remaining 50% membership interests of Carnero Gathering are owned by an affiliate of Targa Resources Corp. (“Targa”). During the third quarter 2016, the Partnership made approximately $3.0 million of capital contributions to the joint venture. Prior to the sale, SN Midstream had invested approximately $26.0 million in the Carnero Gathering joint venture. The fair value of the intangible asset for the contractual customer relationship related to Carnero Gathering was valued at approximately $13 million. This amount will be amortized over the contract term of fifteen years and decrease earnings from the Carnero Gathering. As part of the Carnero Gathering Transaction, the Partnership is required to pay SN Midstream a monthly earnout based upon gas received at Carnero Gathering’s receipt points from SN Catarina and gas delivered by other producers and processing by Carnero Processing, which will begin in 2017. This earnout is considered as contingent consideration and its estimated fair value of $4.3 million was recorded on the balance sheet as a deferred liability as of September 30, 2016.

As of September 30, 2016, the Partnership has paid approximately $40.0 million for the Carnero Gathering Transaction related to the initial payment and contributed capital. The Partnership has accounted for this investment as an equity method investment. Targa is the operator of the joint venture and has significant influence with respect to the normal day-to-day construction and operating decisions. We have included the investment balance in the “Equity investment” caption in our Condensed Consolidated Balance Sheet. The Partnership recorded earnings of approximately $1.3 million in equity investments from Carnero Gathering, which was offset by $0.2 million related to the amortization of the contractual customer intangible asset for both three and nine months ended September 30, 2016. We have included these equity method earnings in the “Earnings from equity investments” line within the Condensed Consolidated Statement of Operations. On October 6, 2016, the Partnership announced a definitive agreement to purchase 50% of the membership interests of, and any remaining commitment to invest in, Carnero Processing from SN Midstream (see further discussion in Note 18, “Subsequent Events”).