Open Season Announced for Bakken Crude Transportation

A binding joint tariff open season to solicit commitments for crude oil transportation service was announced by Kinder Morgan and Tallgrass Energy.

The crude oil transportation services starts from Bakken origin points on the Hiland Crude system, which is currently capable of moving approximately 88,000 barrel per day from Bakken origin points to Guernsey, WY.

Then through the Pony Express system, which is currently capable of moving approximately 375,000 barrel per day from Guernsey to Cushing, OK, connecting to three refineries along the way.

The binding open season begins July 1, 2019, at 4 p.m. Central Time and is expected to end on July 28, 2019, at 5 p.m. Central Time. Upon completion of a confidentiality agreement, additional documents and details related to the open season will be made available.

Source:
pgjonline

Flint Hills May Sell Their Texas Crude Export Terminal

U.S. oil refiner, Flint Hills Resources, recently hired JP Morgan Chase to assist in marketing the assets of their crude export terminal in Ingleside, Texas. Flint Hills is considering finding a partner for the operation or simply selling it on its own. The terminal is a connecting point for several pipelines, including some owned by Phillips 66 and Plains All American Pipeline LP.

Andy Saenz stated, “we want to understand how the market values the asset and whether there is an opportunity to utilize the terminal better than we are today.”

Flint Hills has shared that they are growing storage capacity at Ingleside terminal by 1 million barrels to 3.5 million and have raised the site's vessel loading capacity from 200,000 barrels per day to 380,000 barrels per day.

Source:
Reuters

Stake in Magellan's Longhorn Crude Oil Pipeline Up for Grabs

Magellan Midstream Partners is exploring a sale of a 35% stake in its Longhorn crude oil pipeline in Texas, according to sources familiar with the matter. The evaluation could be as much as $2 billion, and the source spoke on the condition to remain anonymous as the information is confidential.  

The operator is working with investment banks to sell the 35% stake in a new business unit containing the Longhorn pipeline in addition to some storage assets on the coast of the Gulf of Mexico.

Magellan would continue to own the remainder, the sources added. The final bids are expected to be lodged next month.

A spokesman for Magellan said: “We are pleased with our existing assets and our strong financial profile. While we are always open to opportunities to optimize our portfolio, we can’t speak to any particular rumors that may be in the marketplace.”

The 275,000-barrel-per-day Longhorn pipeline transports crude from the West Texas part of the Permian Basin to refining and export facilities in Houston.

Source:
P&OJ

$2.6 Billion Line 3 Pipeline Replacement Project Faces Another Obstacle

The two state agencies in Minnesota, The Minnesota Pollution Control Agency and Department of Natural Resources said on Tuesday that they can't take final action on the permits for Enbridge Energy's Line 3 replacement project, until problems with its environmental review are resolved.

The agencies said they will continue reviewing the applications, but won’t release the draft permits as scheduled on July 1st. The current Line 3, which was built in the 1960s is increasingly subject to corrosion and cracking, and runs at only about half of its original capacity for safety reasons.

The replacement pipeline would carry Canadian crude from Alberta across northern Minnesota to Enbridge's terminal in Superior, Wisconsin, which sits near the westernmost tip of Lake Superior. Earlier this month, Minnesota State Court of Appeals ruled that the project's environmental impact statement failed to address the possibility of a spill into the Lake Superior watershed.

"We believe the actions required to address the spill modeling in the Lake Superior watershed can be completed efficiently," Enbridge said.

According to the environmental and tribal groups, the project poses a risk of oil spills in pristine areas of the Mississippi River headwaters region where Native Americans gather wild rice, and that the Canadian tar sands oil that the line would carry accelerates climate change.

Source:
pgjonline

Open Season Extended for Tallgrass Energy’s Pony Express Pipeline

Tallgrass Energy, LP has announced that it has extended and expanded its open season soliciting shipper commitments for crude oil transportation services.

The open season, initially announced on 13 November 2018, has been extended to 14 April 2019. This is to reflect updated rates and contracting options to accommodate newly secured commitments.

The 760-mile Pony Express crude oil pipeline originates in Guernsey, Wyo., and runs through Colorado, Nebraska and Kansas, connecting with three refineries before terminating in Cushing, Okla.

Placed in service in 2014, Pony Express has a design capacity of 320,000 barrels a day, and based on a number of factors has the capacity to transport additional barrels.

Sources:
worldpipelines
tallgrassenergylp

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.

Source:
pgjonline

Enbridge's Line 3 Pipeline Opening Delayed in Minnesota

The startup plans of Line 3 replacement crude oil pipeline through northern Minnesota by the Canadian-based Enbridge Energy is delayed by a year, the company said on Friday. The company now expects the new pipeline to go into service in the second half of 2020.

The project was approved last summer by the state’s Public Utilities Commission and the initial plan was to put the pipeline into service in the second half of 2019.

But the Minnesota Department of Commerce argued that Enbridge failed to provide legally adequate long-range demand forecasts to establish that is needed.

Minnesota Gov. Tim Walz recently said his administration will keep pursuing an appeal of an independent regulatory commission's approval of Enbridge's plan.

According to Enbridge Energy, Line 3 is increasingly prone to cracking and corrosion, and wants to be replaced. But the Native American and environmental activists argue the project risks spills in pristine areas.

Source:
abcnews

Tioga Gathering System to Be Acquired by Hess Midstream Partners

Hess North Dakota Pipelines agreed to purchase the crude oil and gas gathering assets of Summit Midstream Partners’ Tioga Gathering System for about $60 million gross or $12 million net to Hess Midstream.

The acquisition includes 73 miles of crude pipelines and 79 miles of gas pipelines. In a separate deal, Hess Midstream’s sponsor, Hess Infrastructure Partners (HIP), agreed to acquire the water gathering assets of the Tioga System from Summit Midstream Partners which includes 75 miles of produced water gathering pipelines.

Hess Midstream Partners chief operating officer John Gatling said, “We are excited to extend our infrastructure footprint with the agreement to purchase the Tioga System’s crude oil and gas gathering assets.”

The Tioga System, located in Williams County in western North Dakota, is complementary to Hess Midstream’s infrastructure and is delivering volumes into Hess Midstream’s gathering system. The completion of the acquisition is expected to take place in the first quarter of this year.

Source:
pgjonline

Two Houston Pipeline Companies Joining Forces to Add Crude Oil, NatGas & Saltwater Lines in the Permian

Five Point Energy of Houston and Matador Resources of Houston are partnering to form San Mateo Midstream II LLC. This will allow their customers to move more crude oil, natural gas and produced water on the New Mexico side of the Permian Basin.

"The Delaware remains one of the most promising producing basins in North America, yet it lacks sufficient permanent 'in-basin' midstream infrastructure," Five Point Energy CEO David Capobianco said in a statement.

The joint partnership plans to process 200 million cubic feet of natural gas per day, by building a cryogenic natural gas plant near Carlsbad, New Mexico. There are also plans to build two saltwater disposal wells and pipelines to move crude oil, natural gas and produced water from remote wells to nearby storage tanks.

San Mateo Midstream II is the second joint venture between Five Point Energy and Matador Resources. Matador Resources will own 51 percent of San Mateo Midstream II and Five Point will own 49 percent. The companies already launched San Mateo Midstream I LLC in Feb. 2017 to build pipelines and other infrastructure in Eddy County, New Mexico and Loving County, Texas.

Source:
Chron

Energy Transfer's Dakota Access Pipeline to Expand to 570,000 bpd

The Dakota Access pipeline system’s capacity has been boosted to 570,000 barrels per day as production in the Bakken shale basin has climbed to record highs, Energy Transfer LP said on Thursday.

Due to the surge in demand, Energy Transfer said it is considering more expansions on the system and it would be able to add capacity by increasing horsepower to boost throughput.

The shale revolution has helped propel the United States to the position of world’s biggest crude oil producer. In North Dakota’s Bakken region, shale production is estimated to rise about 13,000 bpd to a record 1.45 million bpd in March. The U.S. total crude production has climbed to a weekly record of 11.9 million bpd.

Source:
Reuters

TransCanada Restarts Keystone Oil Pipeline After Recent Leak in Missouri

A section of TransCanada’s Keystone oil pipeline has been restarted after a leak of about 43 barrels of crude occurred in Missouri earlier this month forcing the company to shut service on the pipe, company spokesman Terry Cunha said.

Keystone pipeline system allows the flow of 590,000 bpd taking Canadian crude from northern Alberta to refineries in the U.S. Midwest.

Following a leak of 43 barrels of crude oil, TransCanada had shut an arm of Keystone from Steele City, Nebraska to Patoka, Illinois on February 6th.

A spokesman for U.S. regulator PHMSA said that the line was restarted with a 20 percent reduction of pressure.

Source:
Reuters


Plains’ Capline Pipeline Reversal to Begin Service in Third Quarter 2020

Plains All American’s Capline crude pipeline is expected to begin service in the third quarter of 2020, according to an announcement by the company on Tuesday.

The U.S. Midwest to Gulf Coast pipeline has the target in-service date for light oil service in third quarter 2020 while heavy oil service is expected in early 2022.

“The capacity from Cushing, Okla. down to St. James, Lou. should be available on a quicker time frame than heavy moving down from Illinois,” Chief Executive Officer Willie Chiang said on the call.

The Cushing to St. James shipment would include 200,000 barrels a day of expansion, pending a successful open season, and a modest extension of the Diamond JV pipeline that will connect to Capline, Plains said.

Currently, Capline is the largest crude pipeline running from the Gulf Coast to refineries in the Midwest. Volume on Capline have sharply declined as the U.S. shale boom pushed inland crude to East Coast and Gulf Coast.

Source:
Reuters

BP Discovers 1 Billion Barrels of Crude in Louisiana Gulf Coast

1 billion barrels of crude was discovered off the tip of Louisiana in the Gulf of Mexico thanks to next-generation technology.

BP, the Gulf of Mexico’s biggest producer, announced the news as well as announcing two new offshore oil discoveries and a major new investment in a nearby field.

The billion barrels of crude was discovered in an existing oilfield and will take BP from 300,000 barrels of oil equivalent per day to an expected 400,000 boepd by the middle of the next decade.

The discovery was made at the Thunder Horse field.

Source:
CNBC

U.S. Achieves New "Net Petroleum Exporter" Status for First Time in 70 Years - Loses It One Week Later

The United States has lost its newly acquired status of being a net petroleum exporter in as quick as a week after achieving the status in the end of November.

It had been almost 70 years since the U.S. last shipped out more combined crude oil and refined petroleum products than it imported. The federal government made waves when it revealed last week that it had achieved that feat again.

Exports fell in the first week of December, returning the U.S. to its prior status.

Crude exports fell from a record weekly high of 3.2 million barrels a day to 2.3 million barrels a day last week.

The fall resulted in the U.S. going from an overall petroleum net exporter of 211,000 barrels a day to a net importer of 1.3 million barrels a day.

The U.S. is expected to eventually become a sustained net exporter.

Source:
Chron

Open Season Launched for Gladiator Pipeline Linking Oklahoma and Houston

An open season will be held to solicit binding commitments for development of a pipeline system that will transport segregating batches of light crude from Cushing, Okla. to Houston.

SemGroup Corp. and DCP Midstream LP (jointly known as “Carriers”) are the involved companies for the proposed Gladiator Pipeline that would start at SemGroup’s Cushing terminal.

SemGroup said that Gladiator will offer DJ basin and other Midcontinent producers an additional outlet to the US Gulf Coast.

Pending sufficient interest and regulatory approvals, Gladiator could be operational by third-quarter 2020 and have a capacity of 300,000 bpd.

The open season ends Jan. 31, 2019.

Source:  SEMGroup

Source:
SEMGroup

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.

Source:
Houston Chronicle

Exxon Starts Groundwork for Texas Refinery's Shale Oil Expansion

Exxon Mobil has begun groundwork at a Texas refinery that would become the largest in the U.S. in advance of a final decision on the expansion, three sources familiar with Exxon’s plans said.

The company has also began hiring and training staff to operate the distillation unit, which would be the third of its kind at the site. The expansion would increase crude processing capacity at its Beaumont, Texas, refinery by at least 300,000 barrels per day from the current 365,644 bpd, the sources said.

Crude oil would be converted from Texas shale fields into refined products such as diesel and gasoline. The plan is to triple daily crude production in the Permian Basin of West Texas and New Mexico by 2025.

After a final investment decision is made, the crude unit is scheduled to start next year, with processing beginning by 2022, a spokeswoman confirmed in an email this week.

Eight operators were added to the refinery and are gaining experience working on the two existing crude units. After the new processing unit is built, they will move over, sources said.

Source:
Reuters

Enterprise's Seaway Pipeline Delayed Until End of Year Due to "Third Party Issues"

Enterprise Products Partners LP’s Seaway crude pipeline will not achieve the targeted 950,000 barrels per day capacity because of issues unrelated to the expansion, the company revealed on Tuesday.

Enterprise and its joint venture partner Enbridge originally expected to begin taking an additional 100,000 bpd in September but that target date was delayed due to what the company described as “third-party issues unrelated to the capacity expansion, an Enterprise spokesman said. No further details were provided.

Recently, the company began adding a friction-reducing agent to increase the potential capacity of the 760-mile pipe.

In the Permian Basin, crude production has outpaced the region’s pipeline capacity, causing bottlenecks and depressing prices in the region. Enterprise and others are building new pipelines or expanding existing lines to soak up the new production.

Seaway’s existing system was expanded several years ago to carry up to 850,000 bpd from the main U.S. crude storage hub in Cushing, Oklahoma, to storage facilities and refineries along the Gulf Coast.

Source:
Reuters

Part of Enbridge's Ohio TEAL NatGas Pipeline Now in Service

Enbridge said on Tuesday that part of its Texas Eastern Appalachian Lease (TEAL) natural gas pipeline project in Ohio has been put into service, according to a company filing with U.S. federal energy regulators.

TEAL is designed to be one of several different gas pipelines that connect growing output in the Marcellus and Utica shale basins in Pennsylvania, West Virginia and Ohio with customers in other parts of the U.S. and Canada.

FERC approved to put the 0.95-billion cubic feet per day TEAL project into service on Sept. 12. The project will serve as a supplement to the $2.6 billion NEXUS gas pipeline from Ohio to Michigan.

Enbridge projected it would be able to put both TEAL and NEXUS into service in the third quarter of 2018.

Source:
Reuters

EPIC's 730 Mile Pipeline to be Converted from NGL to Crude

EPIC Midstream will temporarily convert their multibillion-dollar natural gas liquids pipeline it is building in Texas to service crude oil in an attempt to help alleviate the shortage of pipelines in West Texas’ Permian Basin.

The 730-mile NGL pipeline is planned to be online in the third quarter of 2019 and will deliver crude oil at least until January 2020 when its adjacent crude oil pipeline system is projected to start up.

"We are proud to be able to offer an interim solution for our customers, while we continue to build out the EPIC Crude Oil Pipeline to service this region," said Phillip Mezey, chief executive of EPIC.

EPIC lists its top customers as Houston Firms Noble Energy, Apache Corp. and Midland-based Diamondback Energy.

Source:
Houston Chronicle