Kinder Morgan Moves Forward with South Texas Pipeline Connection

Kinder Morgan Inc., announced on Wednesday that the company will go ahead with the South Texas pipeline connection that would transport crude from Phillips 66’s Gray Oak pipeline in the Permian Basin to delivery points at the Houston Ship Channel.

“We wanted to find a way to get Permian barrels to KMCC (Kinder Morgan Crude and Condensate pipeline),” which delivers crude from the Eagle Ford Shale in South Texas to Houston Ship Channel destinations, Chief Executive Officer Steven Kean said.

Kinder Morgan and Phillips 66 began soliciting shipper commitments for the connection in February. The company plans to spend $10 million on the project this year and expects the connection could carry 100,000 barrels per day.

The service is expected to begin by the end of 2019 and has contracts to start transporting 75,000 barrels per day for up to three years. The company is also considering converting an underutilized natural gas pipeline to carry crude from the Bakken shale in North Dakota and the Denver-Julesburg basin in Colorado.

Source:
reuters

Cactus II Oil Pipeline to Begin Line Fill in a Week

Plains All American Pipeline LP’s Cactus II oil pipeline system will commence line fill within a week, a source with direct knowledge of the matter said. The Cactus II has the capacity of 670,000 barrel per day and runs from Permian Basin to the Corpus Christi, Texas area.

Cactus II project is progressing on schedule for initial service by the end of the third quarter of 2019, the pipeline operator said last month. Commodities merchant Trafigura signed a long-term agreement with Plains last year to transport a total of 300,000 bpd of crude and condensate on the Cactus II pipeline.

“We have over 90% of the pipe in the ground and we’re working diligently toward completion,” a company executive said during its investor day about two weeks ago. Concho Resources Inc., and Anadarko Petroleum Corp are the other two shippers on the Cactus II line.

Source:
pgjonline

Plains Cactus II Crude Pipeline Rate Structure Receives Partial Approval

The rate structure and terms of service for Plains All American Pipeline LP’s Cactus II crude line recieved partial approval from U.S. energy regulators on Monday. The Cactus II crude pipeline runs from the Permian basin to the Corpus Christi, Texas area.

The regulators approved most conditions put forth by Plains. However they declined to approve a request for the option to hold another open season to solicit shipper commitments for up to 90 percent of the pipeline’s capacity upon the expiration or early termination of service agreements.

The 585,000 barrels per day Cactus II line is expected to begin service in the third quarter and will connect the Permian basin to the Gulf Coast.

Source:
reuters

Partial Service on Plain’s Cactus II Pipeline Expected to Start in Q3

Cactus II pipeline construction from the Permian Basin to Corpus Christi, Texas, is on schedule, said Plains All American Chief Executive Officer Willie Chiang during an earnings call late on Tuesday. Also the partial service to Ingleside is expected to be completed in the third quarter of 2019.

“We are at full speed ahead on progressing the project ... the pipe’s been ordered,” Chiang said, adding that discussions with additional potential shippers is ongoing.

He added that the full service on the Cactus II pipeline is expected by the first quarter of 2020. Another pipeline from the Delaware Basin, called the Wink-to-Webster project, is targeted to be placed into service in the first half of 2021, which is expected to have a capacity of more than 1 million barrels per day.

Source:
reuters

Occidental’s Bid Picked by Anadarko Pressuring Chevron to Respond

Anadarko Petroleum said on Monday that it is going with the acquisition offer offered by Occidental Petroleum's jilting Chevron. Now Chevron has four days to up its offer or walk away with the $1 billion breakup fee negotiated in its earlier merger agreement with Anadarko.

Chevron and Anadarko previously agreed to a deal with Anadarko valued at $65 per share and Chevron offered $33 billion to buy Anadarko, but Occidental offered about $38 billion at $76 per share.

"Oxy seems desperate to get this deal done," said Jennifer Rowland, an energy analyst with the financial services company Edward Jones. "They're like a pit bull that bites on and just won't let go."

Comparing to Chevron, Occidental is much smaller, but Occidental has proven itself determined to complete a deal it has pursued for nearly two years. Anadarko have extensive holdings in the Permian Basin oil field in West Texas, where both Occidental and Chevron are leading producers.

Source:
chron

Open Season Announced for Bayou Bridge Pipeline System

Bayou Bridge Pipeline, LLC, a joint venture owned by subsidiaries of Energy Transfer and Phillips 66 Partners recently announced a non-binding expansion open season that commenced at 1 pm CT on 22 April 2019 to solicit shipper interest for expanded joint tariff transportation service received from certain connecting carriers onto the Bayou Bridge Pipeline System.

Energy Transfer owns 60% and Phillips 66 Partners owns 40% of the Bayou Bridge Pipeline system. It is operated by a wholly owned subsidiary of Energy Transfer Operating, L.P. Bayou Bridge is evaluating joint tariff service from origin points in the Bakken/Three Forks Region in North Dakota; Patoka, Illinois; the Powder River Basin in Wyoming; the DJ Basin in Colorado; Cushing, Oklahoma; and the Permian Basin.

Bayou Bridge also continues to evaluate additional Southern Louisiana destination points to increase options for shippers on the system,in addition to the routes that are the subject of this non-binding expansion open season. Bayou Bridge will hold a binding expansion open season to finalize committed subscriptions, following the confirmation of shipper interest.

Source:
worldpipelines

Stonepeak Buys Oryx Midstream in a $3.6 Billion Deal

In a $3.6 billion deal, New York private equity firm Stonepeak Infrastructure Partners bought all of Permian Basin-focused pipeline operator Oryx Midstream’s assets, the two companies announced the deal on Tuesday.

Oryx is publicized as the largest privately-held crude oil pipeline and storage terminal operator in the Permian Basin of West Texas and New Mexico, with more than 1,200 miles of pipeline and 2.1 million barrels of storage.

"As we begin our next chapter and new partnership with Stonepeak, we look forward to the operational and capital support they will provide our team as we continue to aggressively grow our footprint in the Permian Basin," Oryx Midstream CEO Brett Wiggs said in a statement.

"Our critical focus will be on continuing to provide Oryx's diversified customer base with best in class service offerings to accommodate their growing production while also pursuing new commercial opportunities across the value-chain," Stonepeak partner and energy business head Jack Howell said.

The Midland pipeline operator recently completed construction on the first phase of a crude oil gathering system in an area of the Permian Basin known as the southern Delaware Basin, which includes parts of southern New Mexico and West Texas. Oryx will be able to keep its name and headquarters in Midland, under the deal with Stonepeak.

Source:
chron

Cheniere Energy To Begin Exporting LNG to Corpus Christi

Cheniere Energy will export its first shipment of liquefied natural gas from Corpus Christi. The company will receive natural gas from the Eagle Ford Shale, Permian Basin and other sources through pipeline, and then liquefy the gas and use tankers to export it to customers in Europe, Latin America and Asia.

Although the first shipment’s destination is not yet clear, the export terminal’s customers will hail from Europe, Asia, and Australia.

The company expects a second processing unit known as Train 2 to be completed during the first quarter of 2019 in Corpus Christi.

Crews with general contractor Bechtel began constructing a third processing unit known as Train 3 during the summer.

Source:
Houston Chronicle

Targa Resources and Partners to Compete with Kinder Morgan, Plans for 600-Mile Permian Pipeline

Targa Resources, a Houston Pipeline firm, said it would be teaming up with multiple partners to build a 600-mile natural gas pipeline system from West Texas’s Permian Basin to Corpus Christi and Houston regions.

The partnership would put Targa in direct competition with Kinder Morgan and other companies’ massive gas pipelines in the race to build crude oil pipelines and serve the record levels of production from the Permian. Kinder Morgan recently announced plans for a 430-mile Permian Highway Pipeline project to transport natural gas to Houston and Corpus hubs.

Targa said on Friday that its aim is to build the Whistler Pipeline project with Florida’s NextEra Energy, Ohio’s MPLX and some private equity investors as partners.

The project would transport 2 billion cubic feet of gas per day through 42 inch pipelines stretching 450-miles from Waha, Texas to just west of Corpus Christi. A 30-inch pipeline would transport the shipment an additional 170-miles to Wharton County.

Source:
Houston Chronicle
 

 

ETP to Have 10 Day Maintenance in October for Texas Gulf and Mid-Valley Pipeline

Energy Transfer Partners LP expects to have their Texas Gulf and Mid-Valley pipeline go through maintenance activities in October, according to a spokeswoman on Monday.

The maintenance should be completed in 10 days and the company has notified the shippers of the expected work.

Mid-Valley pipeline connects with ETP’s West Texas Gulf pipeline and hauls 238,000 bpd of crude from Texas to the Midwest.

Pipeline bottlenecks in the Permian Basin have affected oil prices in the Midland Region resulting in the weakest crude prices in four years in Midland last week.

Source:
Reuters

Oryx Midstream to Increase Capacity of its Permian Oil Pipeline to 650,000 Barrels After Expansion

Midland-based Oryx Midstream Services II is expanding an under-construction crude oil pipeline system in the Permian Basin by adding 180 miles of additional pipeline to its regional pipeline system.

After the expansion is completed, the project’s total system will consist of 400 miles of pipeline capacity, resulting in 650,000 barrels of crude oil with a total of 1.5 million barrels of crude oil storage.

It will serve West Texas’ Permian Basin in New Mexico and Texas by sending oil from the field to larger pipelines that will send the oil further east.

The pipeline is expected to be fully operating by the second quarter of 2019, with Oryx Midstream Services initially announcing the construction of the system in September with 220 miles of pipeline and 400,000 barrels of capacity.

The lack of construction and continued production remains an issue for crude oil leaving West Texas as producers work to increase construction in order to increase transportation and match output.

Source:
Houston Chronicle

OPEC Likely to Reach Output Decision After Diplomatic Meetings

The Iranian Minister of Petroleum and other delegates met on Wednesday in Vienna for diplomatic discussion regarding the possible outcome of Friday's meeting of the Organization of Petroleum Exporting Countries.

The Iranian minister said during the discussion that he was optimistic that a deal would be reached after meeting with counterparts and discussing matters over a phone call with Russia’s Energy Minister.

His optimism regarding the outcome of Friday’s OPEC meeting contrasts his statements on Tuesday when he stated that any deal would be unlikely as long as production increases.

The decision made is critical to Houston's energy industry who has been a beneficiary to the previous production caps. West Texas’ Permian Basin has been the driving force behind the United States’ surpassing of Saudi Arabia as the world's second largest producer in oil, only trailing Russia.

Source:
Houston Chronicle