Philips 66 Enters Joint Venture to Build $2.5 Billion Red Oak Pipeline

Phillips 66 has teamed up with Plains All American Pipeline LP to construct the $2.5 billion Red Oak Pipeline system that will deliver crude oil from Cushing, Oklahoma, and the Permian Basin in West Texas to Corpus Christi, Ingleside, Houston and Beaumont, Texas.

The plan is to build a 30-inch pipeline from Cushing to Wichita Falls and Sealy, Texas. It also will build a 30-inch pipeline segment from Sealy to Corpus Christi and Ingleside and a 20-inch pipeline segment from Sealy to Houston and Beaumont.

The company expects to commence initial service as early as the first quarter of 2021. As per the release, Plains will handle project construction and Phillips 66 will operate the pipeline.

“Red Oak represents a capital-efficient industry solution that will utilize existing assets and provide pull-through benefits to our systems,” Willie Chiang, CEO of Plains All American, said in the release. “We look forward to working closely with Phillips 66 and our committed shippers to bring Red Oak into service and further optimize our assets upstream and downstream of the new pipeline system. We also look forward to creating jobs and supporting economic growth in Oklahoma and Texas.”


Cheniere Energy Gets Approval to Introduce Feed Gas into Train 2

Federal Energy Regulatory Commission gave Cheniere Energy the permission to start introducing feed gas into a production unit known as Train 2 at Corpus Christi LNG exporter terminal, in an order issued on Monday morning.

The startup process for Train 2 began in January. FERC officials already gave permission to Cheniere two weeks ago to begin commercial operations for Train 1 at Corpus Christi LNG.

Cheniere is bringing its second production unit at Corpus Christi LNG at a time of growing exports. U.S. LNG producers exported a record 483 shipments of LNG in 2018, an 84 percent increase from the previous year, figures from the Department of Energy show.


Moda Midstream Planning to Build a Second Supertanker Berth to Handle Three New Pipelines

An expansion project to build a second berth to accommodate supertankers is in consideration by Moda Midstream LLC at its crude export terminal in Ingleside, Texas, the company’s CEO Bo McCall said on Thursday.

As three major pipelines by Plains All American Pipeline LP, EPIC Crude Pipeline LP and Enbridge Inc., starts service, the expansion to the terminal is necessary. Also the company is increasing the facility’s crude storage capacity from 2 million to 12 million barrels.

“When these new pipelines come online, there is going to be close to 3.5 million barrels a day coming into the market,” McCall said. In order to handle other types of tankers, Moda is also studying the feasibility of building an additional pier with two more berths, McCall said.

Moda’s loading ability per supertanker will rise to 1.5 million barrels once the U.S. Army Corps of Engineers approves the contract this year to dredge the Corpus Christi ship channel to the Ingleside facility to a depth of 54 feet from 47 feet.


$18 Billion LNG Deal Expected Between Cheniere Energy and China's Sinopec

The Wall Street Journal and S&P Global Platts reported that the Cheniere Energy is close to signing an $18 billion long-term LNG supply deal with China's state-run oil company Sinopec.

The Journal reported that the deal could be announced end of March as part of a broader US-China trade deal at a summit between U.S. President Donald Trump and Chinese President Xi Jinping.

Recently FERC gave Cheniere the green light to put the first production unit at its Corpus Christi LNG unit into service and begin exports.

Cheniere signed two LNG supply deals with PetroChina International Co. a year ago and weeks after Trump’s trade mission to China in November 2017.

The Wall Street Journal also reported that the deal with Sinopec could also include financing from state-owned Chinese banks for Cheniere to further expand its export capacity.


Open Season Extended on 650-Mile Jupiter Pipeline

Jupiter Energy extended an open season until May 31 for the 650-mile, 36-inch Jupiter pipeline stretching from the Permian to the Port of Brownsville.

“We're very pleased with the results of the initial open season period for the Jupiter Pipeline,” said Albert Johnson, president of Jupiter Pipeline. “The supplemental period validates our belief that the interest for transportation commitments on the pipeline is as substantial as expected.”

The pipeline will be originating near Crane, Texas, and Gardendale/Three Rivers, Texas and is the only pipeline out of the Permian Basin with access to all three deep water ports in Texas (Houston, Corpus Christi and Brownsville). It is expected to be operational in fourth quarter of 2020.

It will have direct access to a fully capable VLCC loading facility off coast at Brownsville, where the Jupiter Brownsville Terminal will consist of up to 10 million barrels of storage, three docks and an offshore VLCC loading facility.


Enbridge Authorized to Place Cross-Border NatGas Pipeline into Service

Enbridge recently received an order from The Federal Energy Regulatory Commission on Thursday for the permission to put the cross-border natural gas pipeline into service.

Enbridge has received permission to put the cross-border natural gas pipeline into service after the FERC provided an order on Thursday.

The 165-mile Valley Crossing pipeline begins near the Agua Dulce hub near Corpus Christi and ends under the seafloor in the Gulf of Mexico just a few miles east of the mouth of the Rio Grande. The pipeline is designed to move 2.6 bcfd of natural gas.

Texas-Tuxpan Pipeline, a project that will move natural gas from the border to the Mexican state of Veracruz is also nearing completion.

The Valley Crossing Pipeline has been mechanically complete since October and has been awaiting the Mexican pipeline’s completion, an Enbridge spokesman confirmed.

Once the Texas-Tuxpan Pipeline and The Valley Crossing Pipeline are in operation, they will deliver natural gas from Texas to power plants in Mexico's interior.


Noble Midstream Invests Nearly $500 Million in EPIC Pipeline

Noble Midstream Partners has purchased a 30 percent stake in the EPIC Crude Oil Pipeline as well as a 15 percent stake in the EPIC Y-Grade Pipeline. The stakes purchased are part of projects that will move crude oil and natural gas liquids from the Permian Basin to the Port of Corpus Christi.

Natural gas liquids from the Permian Basin of New Mexico and West Texas will be moved to a facility in Robstown through the 700-mile EPIC Y-Grade Pipeline project. Crude oil from seven terminals in the Permian Basin and Eagle Ford Shale of South Texas will be moved to a facility in Robstown through 650-mile EPIC Crude Oil Pipeline project.

The company will be investing between $330 million and $350 million in cash for its stake of the crude oil pipeline and another $165 million to $180 million for its stake of the EPIC Y-Grade Pipeline.

San Antonio pipeline operator EPIC Midstream Holdings LP will be developing the two Permian Basin-to-Corpus Christi projects.

By January 2020, construction of the crude oil pipeline is expected to be completed.

"Both projects remain on schedule and are critical to the continued development of the Permian Basin and Eagle Ford Shale," EPIC Midstream Holdings CEO Phillip Mezey said in a statement.


Kinder Morgan Allocates $2.3 Billion in Discretionary Budget to Natural Gas Projects

Kinder Morgan’s Vice President and Chief Financial Officer David Michels gave a peek at the 2019 budget, announcing that nearly $2.3 billion of Kinder Morgan’s $3.1 billion discretionary budget will be allocated to natural gas projects.

Two of their biggest projects are pipelines that will move natural gas from the Permian Basin of West Texas to the Gulf Coast.

Kinder Morgan is leading a joint venture with three other companies to bring the Gulf Coast Express Pipeline into service by October.

The cost of the 42-inch pipeline is $1.75 billion and will move 2 billion cubic feet of natural gas per day from the Waha Hub in the Permian Basin to the Agua Dulce hub near Corpus Christi.

The company is also a lead developer in another 42-inch pipeline, the $2.1 billion Permian Highway Pipeline. It is expected to come into service in Oct. 2020 and move 2 billion cubic feet of natural gas from the Waha Hub to the Katy Hub near Houston.
Kinder Morgan is also eyeing projects to boost its natural gas exports to Mexico and develop other pipelines to support the growing liquefied natural gas industry along the Gulf Coast.

The company plans to put its own Elba Island KNG export terminal near Savannah, Georgia into service by the end of the first quarter.


Pin Oak Terminals Plans to Build Short-Distance Pipelines on Newly Acquired 236 Land

Pin Oak Terminals is expanding its footprint at the Port of Corpus Christi through the purchase of 236 acres of land near an existing Pin Oak facility, the company announced on Tuesday Morning.

Pin Oak plans to build short-distance pipelines on the newly acquired land connecting storage terminals to existing company owned docks as well as new rail facilities that are also planned on being built.

Although financial terms of the real estate deal were not disclosed, the company reported that it plans to develop the land to accommodate 10 million barrels of bulk liquids storage that can be shipped via rail or tanker.

"We are excited to be expanding our footprint through this acquisition which will bring incremental tankage and logistics solutions to our customers," Pin Oak Holdings CEO Mike Reed said in a statement.

”Pin Oak is in a unique position to offer its customers a full logistics solution through its direct refinery connections, Suezmax vessel and barge dock capabilities, truck loading and unloading bays, and direct access to two Class 1 railroads.”


Cheniere’s Corpus Christi Train 2 Gets Approval to Start Operating

Cheniere’s request to introduce gas and begin operation for the Corpus Christi LNG’s Train 2 fuel gas system has been approved by the FERC.

FERC noted that the approval does not grant Cheniere the authority to introduce hazardous fluids into other facilities at the LNG terminal.

The facility in Corpus Christi consists of three large-scale LNG production units and supporting infrastructure. Seven additional smaller trains have also been proposed.

Train 2 is expected to reach substantial completion in the second half of 2019 with Train 3 to follow in the second half of 2021.

LNG World News

Open Season Launched for Phillips 66 Proposed Pipelines

Phillips 66 launched open seasons for the newly proposed Red Oak pipeline and Liberty pipeline.

Both projects will be joint ventures with Bridger Pipeline LLC and will deliver crude oil to the Texas Gulf Coast.

The Liberty Pipeline will start in the Rocky Mountains and Bakken Formation production areas and end in Corpus Christi, Texas and will have an initial throughput capacity of 350,000 barrels per day with potential to expand further depending on shipper interest, per the release.

The Red Oak Pipeline will run from Cushing, Oklahoma, to Corpus Christi, Houston and Beaumont, Texas and will have 400,000 bpd capacity while also possibly expanding depending on interest.

Biz Journals

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.

Houston Chronicle

Magellan's Open Season for 500 Mile Pipeline Announced as Possibilities of New Houston to Corpus Christi Pipeline is Evaluated

Magellan Midstream Partners and Navigator Energy Services announced the launch of a binding open season on Monday to gauge customer interest in a pipeline project designed to ship light crude and condensate from Cushing, Oklahoma to Houston, Texas.

According to Magellan, the proposed Voyager pipeline would compromise of nearly 500 miles of 20-inch diameter pipe linking the company’s terminals in Cushing and East Houston. Once it reaches Houston, the pipe would link to refineries in the region as well as crude oil export facilities.

The open season documentation states that a new entity called “Magellan Navigator” would operate Voyager. Initial capacity is said to be at least 250,000 barrels per day and would handle up to four light crude and condensate grades.

Magellan also said that the company is evaluating a potential crude oil pipeline from Houston to Corpus Christi as well as a crude export terminal on Harbor Island with capabilities of loading very large crude carriers.

The open season ends January 31, 2019 with the pipeline beginning service by the end of 2020 pending a successful open season and regulatory process.

Rig Zone

Texas Gulf Coast Oil Exports Exceed Imports for First Time

In April, oil exports in the Houston-Galveston port district exceeded imports by 15,000 barrels a day, and that difference grew to 470,000 barrels a day in May. It marks the first time that oil exports exceed imports on record, according to the data from the Department of Energy.

The Houston-Galveston port district includes the ports of Houston, Texas City, Galveston, Freeport, Port Lavaca, and Corpus Christi.

May’s total U.S. crude oil exports rose to a record 2 million barrels a day. That marks a 100 percent increase from last year’s numbers, which were just over 1 million barrels a day.  The Houston-Galveston port district was responsible for 70 percent of total U.S. crude oil exports.

The Energy Department linked the growing export volumes to efforts of expanding infrastructure at the ports of Corpus Christi and Houston. Only the port district of Port Arthur is seeing similar significant crude oil export volumes.

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.

Houston Chronicle


Occidental Petroleum Looking To Potentially Sell Pipeline Assets

Occidental Petroleum Corp (OXY.N) is looking to free up capital to invest in exploration and production by exploring a sale of its pipeline assets, a source familiar with the matter said on Tuesday. The source asked to remain anonymous because of the matter being confidential.

Occidental is looking to fetch upwards of $5 billion in the latest example of an oil company balking at the capital expenditure required to maintain U.S. pipelines. With bottlenecks plaguing the U.S. industry, the construction of new networks is required.

The anonymous source also added that Occidental is working with investment bankers on an auction for the pipeline assets that will include major U.S. crude pipeline, a stake in a gas pipeline in the Middle East, a crude export terminal in Texas, and the Centurion Pipeline.

In addition to those assets, Occidental would include its 50 percent stake in Ingleside Energy Center, a crude oil storage and export terminal in Corpus Christi, Texas which was almost sold a year ago. The sale process was never completed.


Corpus Christi Oil Export's Plans Met with Newly Formed Opposition Group

The Port Aransas Conservancy is opposing plans by the port of Corpus Christi to create an oil export terminal on neighboring Harbor Island.

The export terminal could load two very large crude carriers that would hold up to 2 million barrels of oil.

The Port Aransas Conservancy said it is made up of long-time residents and home owners from Port Aransas, stating that they were “concerned about managing Port A’s growth in a manner that retains the charm that brought us here in the first place.”

The conservancy lists negative impacts on the local tourism sector, locating large oil storage tanks in storm surge-prone areas, and spill risks as 3 of the 14 reasons it opposes the project.

The commissioner has already started looking into the feasibility of using Harbor Island for oil exports, with the channel to the island needing to be deepened to 75 feet instead of the 54-foot depth the corps project would achieve, just to fully load the two large crude carriers.

Houston Chronicle

Cheniere Decides to Move Forward with Third LNG Unit in Corpus Christi

Cheniere Energy is moving forward with building a third unit to process liquefied natural gas at its export facility that is currently under construction in Corpus Christi.

Cheniere said this will be the first commitment to build new U.S. liquefaction capacity since 2015.

Bechtel is Cheniere's builder for this third unit and had started limited construction on it last year.

Two long-term deals to sell LNG to PetroChina International sparked Cheniere's decision to construct the third processing unit. The sale contracts extend through 2043.

Cheniere has been exporting natural gas through its Sabine Pass facility in Louisiana since 2016 and continues to expand in order to support more production and exports.

The number of foreign markets that receive LNG imports from the U.S. has been increasing. Freeport LNG and Kinder Morgan are scheduled to begin exporting LNG later this year.

Fuel Fix

Apache Corp, Noble Energy to be Major Customers of 730-Mile EPIC Crude Pipeline in Permian

Apache Corp and Noble Energy have signed on as the primary customers for the 730-mile EPIC crude oil pipeline that will move from Texas' Permian Basin to Corpus Christi.

The pipeline is being built by EPIC Midstream Holdings and is expected to be one of the biggest pipelines in a group of major pipeline projects that are underway in the booming Permian to carry oil, gas, and natural gas liquids to port and refining hubs near Corpus Christi and Houston.

EPIC Midstream is also building a natural gas liquids pipelines adjacent to the crude oil project, to which BP has signed on as a major anchor customer.

Apache and Noble have agreed to use 30 percent of the pipeline's planned capacity of 590,000 barrels a day. The crude oil pipeline is expected to come online by the end of 2019.

Fuel Fix

Phillips 66 Partners to Move Forward with Gray Oak Pipeline in West Texas

Phillips 66 Partners said it has received enough commitments from oil producers in West Texas' Permian Basin to move forward with its Gray Oak crude oil pipeline.

The Gray Oak Pipeline will carry crude from West Texas to markets in Corpus Christi, Sweeny, and Freeport in South Texas, according to the Houston-based company.

The pipeline, which could have a capacity of 700,000 barrels per day starting by the end of 2019, will have the potential to expand capacity to about 1 million barrels per day if it becomes fully subscribed.

Gray Oak will connect to a new marine terminal being built by Buckeye Partners, Phillips 66, and Andeavor.

Phillips 66 owns 75 of the project while Andeavor owns 25 percent.

Fuel Fix