UGI to Buy Assets from TC Energy for $1.28 Billion

UGI Corp, a Pennsylvania based energy distributor would buy some assets of Columbia Midstream Group from TC Energy Corp, formerly known as TransCanada. The deal is set for nearly $1.28 billion to expand UGI’s midstream business.

“This transaction expands our midstream capabilities in the prolific gas producing region of the Southwest Appalachian Basin and provides an initial investment into both wet gas gathering and processing,” John Walsh, the chief executive officer of UGI, said.

With this deal, TC Energy could help finance the oft-delayed and controversial Keystone XL pipeline project and the new high-profile Coastal GasLink system project. These projects are likely to generate higher returns than these legacy assets.

Columbia Midstream Group operates in the Appalachian Basin and owns four natural gas gathering systems. It also has an interest in a company with gathering, processing and liquids assets, and a pipeline that runs through western Pennsylvania, eastern Ohio and northern West Virginia.


$3.2B Appalachian Natural Gas Pipeline Gets Approval from FERC

U.S. Federal Energy Regulatory Commission has approved the full in-service of the Mountaineer XPress, a 170-mile natural gas pipeline project in West Virginia, TransCanada said on Friday.

The pipeline will increase natural gas capacity by 2.7 billion cubic feet per day. Together with related infrastructure such as new compressor stations and modifications to existing compressor stations, it will represent a total investment of US$3.2 billion. This will help link the Appalachian basin’s natural gas supplies and growing markets in the U.S. and beyond.

The approval of the full in-service of Mountaineer XPress will allow TransCanada to start partial in-service of its Gulf XPress Project, a network of seven new compressor stations in Kentucky, Tennessee, and Mississippi, which will significantly increase the reach of low-cost, U.S.-produced natural gas from the Appalachian Basin.

“Mountaineer XPress and Gulf XPress are extremely important to TransCanada as they provide much-needed takeaway capacity for our customers, while also growing our extensive footprint in the Appalachian Basin,” TransCanada President and CEO Russ Girling said.


Service Started on 658-Mile Shin Oak NGL Pipeline From Permian Basin to Mont Belvieu

The Shin Oak NGL Pipeline project to move natural gas liquids from the West Texas town of Orla to a processing and storage facility in Mont Belvieu, has its service started, announced on Thursday by Houston pipeline operator Enterprise Products Partners.

Shin Oak is designed and built as a 24-inch diameter 658-mile pipeline and is starting its service with an initial capacity to move 250,000 barrels of ethane, propane, butane and other natural gas liquids per day.

"The Shin Oak Pipeline represents another important addition to our expanding network of integrated midstream assets in the Permian Basin," Enterprise Products Partners CEO A.J. "Jim" Teague said in a statement.

The company is building a third natural gas processing plant in Orla that is expected to be completed by June. Another natural gas processing plant in the Loving County of Mentone is expected to begin service by March 2020. Combined, the Orla and Mentone facilities will give Enterprise more than 1.6 billion cubic feet per day of natural gas processing capacity and more than 250,000 barrels of natural gas liquids production per day in the Permian Basin.


New Assessment of Wolfcamp Basin Reveals It as Most Potential Oil and Gas Resource Ever

The Permian Basin’s Wolfcamp and Bone Spring formations hold more than seven times the oil North Dakota’s Bakken shale holds, according to a U.S. Interior Department in an assessment made on Thursday. It makes Wolfcamp’s oil and gas resources the most potential oil to ever be assessed in history.

The new assessment shows that the Delaware Basin holds more than twice the oil as the largest previous assessment of the region. That study was completed two years ago.

The U.S. Geological Survey’s new assessment found that the Wolfcamp shale and overlying Bone Spring in the Permian holds an estimate 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids.

Interior Secretary and oil and gas advocate Ryan Zinke said the news is an early Christmas present for the energy sector.

"American strength flows from American energy, and as it turns out, we have a lot of American energy," Zinke said. "Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation."

The study is based on undiscovered oil and gas that is considered recoverable due to modern extraction methods.

MSN Money

CenterPoint to Acquire Velocity Midstream for $442 Million

CenterPoint Energy’s pipeline company has agreed to acquire Oklahoma’s Velocity Midstream for around $440 million as they grow their crude oil pipeline gathering and processing network.

Velocity holds a large network in Oklahoma’s Anadarko Basin, which expands into the Texas Panhandle, as well as in the SCOOP and Merge shale plays in Oklahoma.

Enable also said it plans to expand its crude oil and water pipeline gathering systems in North Dakota with the uptick in activity in the region and a large number of drilled but uncompleted wells that have not yet produced oil.

"Today's announcements continue Enable's strategy of extending our reach across the midstream value chain by significantly expanding our crude business," said Enable Midstream President and CEO Rod Sailor.

Last month, Enable announced its plan to build a 165-mile gas pipeline from northwestern to southwestern Louisiana along the Texas state line. Gas would be taken from the Haynesville Shale and other regions to new liquefied natural gas export terminals in Louisiana and Texas.

That project is estimated at around $550 million.

Houston Chronicle

Houston Company Receives Funding to Build New 1 Million Bpd Pipeline

The Jupiter Pipeline, a new 1 million barrel a day crude oil pipeline from West Texas to Brownsville, has received the funding required to be built last week.

The pipeline is under development by Houston-based JupiterMLP and is receiving funding commitments from Charon System Advisors. Charon System Advisors is an affiliate of Houston-based private investment firm Spinel Investment Company.

JupiterMLP has secured permits to build more than 2.8 million barrels of storage and has given governmental and regulatory permits to load and unload vessels that can carry up to 65,000 deadweight tons.

Pipelines from the Permian to the Corpus Christi region are also being developed by San Antonio-based EPIC Midstream and Houston's Phillips 66 and Plains All American.


EagleClaw Midstream To Pay $950 Million to Buy Rival Caprock

Blackstone-backed pipeline company EagleClaw Midstream Ventures LLC said on Wednesday it would buy rival Caprock Midstream Holdings for about $950 million.

Midstream companies are investing in the Permian Basin as a surge of oil and gas production has outstripped transport capacity.

EagleClaw will buy Caprock from Dallas-based private equity firm Energy Spectrum Capital and Caprock Midstream Management.

Caprock will be renamed to EagleClaw Midstream II and operate as a sister entity to EagleClaw after the deal closes this year.

EagleClaw Midstream is a portfolio company of Blackstone Energy Partners, Blackstone’s energy-focused private equity business.


FERC Orders Complete Halt of Mountain Valley Pipeline Construction

U.S. energy regulators have halted all construction of the Mountain Valley pipeline (MVP) in a filing on Friday.

MVP is one of several pipelines currently being constructed to connect growing output in Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the U.S. and Canada.

FERC said in its decision on Friday that is not certain whether or not BLM or Forest Service will ultimately approve the same route for the MVP.

“Should the agencies authorize alternative routes, (Mountain Valley) may need to revise substantial portions of the project route across non-federal lands, possibly requiring further authorizations and environmental review,” FERC said in its filing.

An EQT spokeswoman responded on Saturday to the FERC order saying that the company “respectfully disagrees with the breadth of the August 3 stop work order.”

“We will continue to work closely with all agencies to resolve these issues and look forward to continuing the safe construction of this important infrastructure project,” the spokeswoman added.


Medallion Midstream Asks for Bids for New Expansion

Irving-based Medallion Midstream announced an open season on Monday and is asking for bids as it anticipates a planned expansion.

The West Texas crude oil pipeline system will make a major expansion in the Midland Basin. The oil field is part of the larger Permian Basin, which has seen enormous growth in oil and gas production over the last few years.

Medallion said that the plan was to place new 16-inch pipes along its existing pipeline system, without specifying how many miles would be added, nor the capacity.

Currently, the system runs approximately 700 miles of six-inch diameter pipe.

The expansion comes a week after Oryx Midstream Services announced its own expansion of regional crude oil pipeline in which it will add 180 miles to its existing system.

Houston Chronicle

Kinder Morgan's 270-Mile Utopia Pipeline Now in Service in Ohio

Source:  Utopia Pipeline

Kinder Morgan's 270-mile Utopia pipeline system was placed into service Tuesday and now carries 50,000 barrels per day of ethane products from eastern Ohio to Windsor, Ontario.

The $500 million system, which capitalizes off Ohio's Utica shale play, could be expanded to transport as many as 75,000 barrels per day.

Kinder Morgan is also planning growth in West Texas with a proposed $1.7 billion gas pipeline from the Permian Basin to Corpus Christi in partnership with two other pipeline companies.

The Permian-to-Corpus project is expected to begin operating by October 2019, joining many other planned pipeline projects in the area as the Permian Basin booms.

Fuel Fix

Plains All American Pipeline to Start Construction on Cactus II Pipeline

Plains All American Pipeline has secured enough shipper commitment to start construction on its Cactus II Pipeline, the company said in a statement.

The pipeline will connect the Permian Basin with the crude oil export market in Corpus Christi.

Cactus II will be a combination of new and existing pipelines and will expand the system's crude capacity from 390,000 barrels per day to 575,000 barrels per day.

The pipeline company said it will also start a second open season for customers to commit shipment on the Cactus II system.

Cactus II is expected to be completed by late 2019.

Although Plains' original Cactus Pipeline is the only major oil pipeline connecting the Permian to Corpus Christi, several Permian-to-Corpus pipeline projects are underway, including some by major players like Phillips 66 and Enbridge.

Houston Chronicle

Eagle Ford Growing as Permian Becomes Increasingly Saturated

The Eagle Ford shale in southern Texas is seeing a return in rigs as drilling activity becomes more saturated in the West Texas' Permian Basin.

Of the 13 rigs added this week in the U.S. for oil and gas drilling, 11 of them were added in Texas, with five of them being in the Eagle Ford and just two being in the Permian.

The total count of rigs in the U.S. is now at 870, a large increase from the low 404 rig count last May, according to weekly data compiled by Baker Hughes. Of the 870 rigs, 697 of them are drilling for oil.

The Permian Basin has 342 rigs, accounting for 50 percent of the nation's total oil rigs. The Eagle Ford shale has 83. Texas is the leading state for oil rig count, with 437 rigs overall. Oklahoma has the second highest count at 127, and Louisiana leads in third with 58 rigs.

Fuel Fix