Altus Midstream Acquires 27% Stake in Permian Highway Pipeline

Altus Midstream Processing LP decided to acquire an approximately 26.7% equity interest in the estimated US$2.1 billion Permian Highway Pipeline.

The pipeline is expected to have approximately 2.1 billion cubic feet per day of natural gas transportation capacity. It runs from the Waha area in northern Pecos County, Texas, to the Katy, Texas area, with connections to Texas Gulf Coast and other markets.

“We are very excited to participate in the Permian Highway Pipeline,” said Clay Bretches, Altus Midstream Chief Executive Officer and president. “This is a high-quality project supported by take-or-pay contracts with creditworthy counterparties.”

In September 2018, the final investment decision to proceed with the project was made and the pipeline is expected to enter service in October 2020. Altus Midstream Processing, Kinder Morgan and EagleClaw Midstream Ventures, each owns approximately 26.7% of the pipeline. The remaining 20% is owned by an anchor shipper affiliate.


EagleClaw Midstream Announces Final Investment Decision on Delaware Link Pipeline

EagleClaw Midstream, a portfolio company of Blackstone Energy Partners and I Squared Capital, announced that it has made a final investment decision to proceed with construction of the Delaware Link pipeline.

Delaware Link pipeline is designed to transport residue natural gas from the Delaware Basin to the Waha hub, with access to further downstream takeaway connections. The approximately 40 mile, 30 in. diameter pipeline will originate at EagleClaw’s three existing natural gas processing complexes in Reeves County, Texas and will have transportation capacity of at least 1.2 billion cubic feet per day.

EagleClaw is also evaluating increasing the pipeline’s diameter and related transportation capacity. Delaware Link is intended to provide E&Ps in the Delaware Basin further flow assurance and improved price realization by providing a direct, cost-advantaged path to Waha and multiple interconnections at Waha to various takeaway pipelines.

These interconnections include direct access to the Permian Highway Pipeline, an approximately 2.1 billion cubic feet per day pipeline designed to transport gas from Waha to the US Gulf Coast and other premium priced markets.


$15 Billion Rio Grande LNG Gets Green Light from PHMSA

According to PHMSA’s Deputy Associate Administrator Massoud Tahamtani, the proposed Rio Grande liquefied natural gas export terminal project complies with federal pipeline safety standards. He noted that the facility is being designed to withstand winds up to 150 miles per hour, in a letter of determination made public early Tuesday morning.

FERC will use PHMSA's review to determine if the facility will receive a permit to start construction on six production units that will be able to make more than 16 million metric tons of LNG per year. A final permit decision by FERC is expected in July.

NextDecade Corp will be developing Rio Grande LNG which is one of two proposed export terminals being developed by the company. The company is also in the process of seeking state and federal approval to build the Galveston Bay LNG export terminal in Texas City.

NextDecade is expecting to make a final investment decision on the project during the third quarter, if approved by federal regulators. The liquefied natural gas export terminal and the supporting Rio Bravo pipeline are expected to result in more than $15 billion of private investment and create more than 5,000 construction jobs.


Lake Charles LNG: Final Investment Decision Taken by Energy Transfer and Shell

Energy Transfer and Shell announced that they had signed a project framework agreement to advance the proposed Lake Charles LNG export terminal and that they plan to issue an invitation to tender for engineering, procurement and contracting companies to start bidding on the project, in a joint statement released on Tuesday morning.

“We are pleased to be moving forward with Shell in progressing this major LNG export project," Lake Charles LNG President Tom Mason, President said in a statement. "We believe the combination of our assets and Shell's LNG experience will create a platform for exporting natural gas from the U.S. Gulf Coast to the global marketplace that is unmatched."

Shell entered into a 50-50 joint venture with Energy Transfer in 2016 to develop a liquefaction plant that can produce up to 16.45 million metric tons of LNG per year. Under the terms of their joint venture, Energy Transfer will own and finance the proposed liquefaction facility while Shell will oversee engineering, design and construction work as well as operate the terminal once it is complete.

"Lake Charles presents a material, competitive liquefaction project with the potential to provide Shell with an operated LNG export position on the U.S. Gulf Coast by the time global supply is expected to tighten in the mid-2020's," Shell Vice President Frederic Phipps said in a statement.

If built, the export terminal project is estimated to create up to 5,000 local jobs during construction and 200 full-time positions when fully operational. Shortly after the shale revolution in 2015 that created a surplus of natural gas in the United States, Energy Transfer got permission from Federal Energy Regulatory Commission to build an export terminal at the site in 2015. The facility site was originally developed as an LNG import terminal in 2006.


Joint Venture to be formed by Williams and CPPIB on $3.8 Billion Marcellus-Utica Shale Gas

Canada Pension Plan Investment Board is joining with U.S. energy firm Williams Cos Inc. in a $3.8 billion joint venture to expand its presence in the North American natural gas market.

The joint venture includes Williams’ Ohio Valley Midstream system in the Marcellus shale basin and the Utica East Ohio Midstream system. Canada’s largest pension fund will have a 35 percent stake in the venture, with Williams holding the rest and operating the combined business, the companies said on Monday.

“This joint venture will provide CPPIB additional exposure to the attractive North American natural gas market, aligning with our growing focus on energy transition,” said Avik Dey, managing director, head of energy & resources, CPPIB.

Williams Cos Inc. holds pipeline assets in the Marcellus and Utica shale basins, the biggest gas-producing region in the United States.


$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.


$10 Billion Alaska Stand Alone Pipeline Gains Key Federal Approval

Alaska Gasline Development Corp (AGDC) received the last major federal permit needed on March 4th for its proposed $10 billion Alaska Stand Alone Pipeline (ASAP) to supply natural gas to in-state consumers, the company said on Wednesday.

The ASAP is a 733-mile project designed to deliver gas from Alaska’s North Slope to customers in Fairbanks, Anchorage and other parts of the state.

ASAP is part of state-owned AGDC’s proposed $43.4 billion Alaska LNG project. It is designed to liquefy 3.5 billion cubic feet per day of gas for sale to customers in the Asia-Pacific region from a facility to be built in Nikiski on the Kenai Peninsula south of Anchorage, which includes an 807-mile pipeline.

“We see Alaska Stand Alone as a backup plan. We are mostly focused on Alaska LNG,” said AGDC spokesman Tim Fitzpatrick.

The company has planned to make a final investment decision to build the LNG project in early 2020 that would enable it to enter service in 2025, said AGDC in the past.


Meritage Midstream Acquired by SemGroup and KKR for $449 Million

SemGroup said in a release on Thursday that they have formed a Canadian joint venture with KKR and acquired Meritage Midstream ULC for nearly $450 million.

SemGroup will have a 51 percent common equity ownership in the newly formed joint venture, SemCAMS Midstream ULC, while KKR will own the remaining 49 percent.

Meritage Midstream has an operating portfolio of approximately 195 MMcf/d of natural gas processing capacity, 101 miles of gas gathering pipelines, 38 miles of oil gathering pipelines and 18 miles of emulsion and gas lift pipelines.

The company also has 200 MMcf/d gas processing expansion which is currently under construction and expected to be in service by third quarter this year.


Mexico to Add $16 Billion in Oil and Energy Investments

Mexico’s president-elect announced on Friday that there will be a $16 billion investment plan to boost flagging oil production, refinery capacity, and electrical generation in the country.

The president-elect said that Mexico must act “urgently” to reverse a huge decline in crude output. Output dropped to 1.8 billion barrels per day in the first half of 2018, down from 3.4 million barrels per day in 2005.

The president-elect pledged that 600,000 more barrels will be in production in two years with an initial $9.5 billion in investment being made next year. More investments would be used to upgrade existing refineries, build a new one, and support oil exploration. Hydroelectric and power generation plants were also in the plan to be upgraded.

Octavio Romero was named as head of the state-owned oil company Petroleos Mexicanos.

The new president will take office on December 1.

Houston Chronicle

Infrastructure Investor Pays $1.75 Billion for Permian Pipeline Assets

Private Equity Fund Morgan Stanley Infrastructure Partners is paying $1.75 billion to purchase Permian Basin pipeline assets as production continues to rise in the area.

The firm is acquiring Boston-based Brazos Midstream and its pipeline network, including processing and storage assets in the Permian's Delaware Basin in West Texas.

The deal is through a Morgan Stanley investment fund called North Haven Infrastructure Partners II.

The Permian Basin is seeing a rise in production more quickly than any other oil and gas region in the world, which means acreage and pipelines in the area are selling at high prices.

A burst of private equity money is now flowing to invest in the area after several publicly traded companies have been skeptical to overspend due to the recent market downturn.

Fuel Fix

Noble Energy Partners to Buy Interest in Texas Pipelines for $15 Million

Noble Energy Partners has entered into an agreement to purchase interest in the Midstream Access Pipeline system in Texas for approximately $15 million.

Midstream Access Pipeline consists of a network of about 90 miles of high and low-pressure pipelines in Upton and Midland counties, Texas. It has a capacity of 1.2 billion cubic feet per day and went online in 2015.

Noble Energy's 19 percent interest purchase in Midstream Access Pipeline is "an extension of the company's commitment to reallocating capital in a portfolio of interconnected, complementary assets with predictable cash flows," the company said in a statement.

Noble Energy Partners is a Registered Investment Manager that invests primarily in pipeline and energy-related logistical infrastructure assets, according to its website.

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Noble Energy Partners

Aboriginal Groups in Canada Seek Financial Gains from Energy Projects

Aboriginal groups in Canada are playing a more active role in the country's energy industry by investing in oil and gas projects and subsequently receiving significant returns on energy produced or transported across their territory.

Canada's First Nations play an important role in the country's energy industry because governments and companies are required to consult them before affecting their territories with resource projects.

Some aboriginal groups have used their role to stop projects altogether while others are using the same power to negotiate ownership stakes in pipeline and storage projects as a way to create cash flow.

More investment from First Nations could help unlock oil and gas reserves in Canada that may otherwise stay hidden because of arduous opposition from environmental or other aboriginal groups.

The more First Nations that give support for energy projects in Canada, the more success energy firms will likely have in overcoming concerns from other environmental or aboriginal groups who oppose the projects.


Private Equity Firm Raises $3.25 Billion to Invest in Midstream Companies Across North America

Investment firm EnCap Flatrock Midstream announced the closure of its fourth investment fund after it collected $3.25 billion to pour into midstream companies in North America.

The private equity firm based in San Antonio said it surpassed its investment target of $3 billion in just six months.

The firm has raised about $9 billion from investors since 2008 to pour into midstream companies that operate pipelines, storage tanks, and other transportation infrastructure in the energy sector.

EnCap Flatrock Midstream is a venture capital firm that invests in businesses and assets in the midstream sector of North America's oil and gas industry, according to its website. Although based in San Antonio, the firm also has offices in Houston.

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EnCap Flatrock Midstream

Texas-based Midstream Company Selling $1.6 Billion of Pipeline Assets in New Mexico

Texas-based companies Flatrock Midstream and Lucid Energy Group are selling a natural gas gathering and processing system in New Mexico for $1.6 billion in cash to a joint venture.

The sale is going to a joint venture between Riverstone Holdings, an energy investment group, and the Merchant Banking Division of Goldman Sachs Group.

The fund focuses on developing midstream oil and gas assets such as pipeline and storage terminals.

The pipeline system includes about 1,700 miles of natural gas gathering lines and facilities that can process up to 585 million cubic feet per day of natural gas. More processing is under construction and is expected to be complete by mid-2018.

Houston Chronicle

ONEOK to Build 900-Mile NGL Pipeline from Rocky Mountain Region

ONEOK announced Thursday that it plans to build a 900-mile natural gas liquids pipeline from eastern Montana to its NGL facilities in Kansas to increase takeaway capacity out of the Rocky Moutain region and meet producer needs.

The $1.4 billion Elk Creek Pipeline system is expected to be in service by the end of 2019 and is designed to transport up to 240,000 barrels per day of unfractionated natural gas liquids. With additional pump facilities, the pipeline will then be designed to transport up to 400,000 barrels per day.

The Elk Creek Pipeline is part of ONEOK's previously announced goal to invest $3 billion to $3.5 billion in capital-growth projects.

ONEOK CEO Terry Spencer said the project will strengthen the company's position in the Bakken, Powder River, and Denver-Julesburg regions.


Canadian Offshore Oil Interest Rises as Pipeline Problems Cause Plummeting Oil Prices

Canada's offshore oil industry is drawing rising investment interest as pipeline problems in Alberta cause oil prices to plummet.

ExxonMobil's Hebron off Newfoundland, Canada in the Atlantic became Canada's first new producing offshore oil project in 12 years last month.

Newfoundland's offshore petroleum board has also issued exploration licenses worth nearly US$1.6 billion since 2015.

Rising offshore interest in the Atlantic comes as pipeline and rail capacity fills up in Western Canada, driving prices to four-year lows.

Foreign companies have sold about $23 billion worth of assets in Western Canada due to depressed prices.

Paul Barnes, a Newfoundland-based director with Canadian Association of Petroleum Producers, said oil companies are likely taking some of the money they would have put into Alberta and using it for interests in offshore.


Alaska Signs Major Pipeline Project Deal With China

The state of Alaska signed an agreement with interests from China that will attempt to advance Alaska's major natural gas pipeline project from the North Slope to Asia.

The agreement was signed Thursday with Sinopec, China Investment Corp, and the Bank of China, giving the approximately $43 billion project a jolt of life after major oil companies backed away from the project. It does not guarantee that the pipeline will be built, but it is a major step forward in the process.

All parties will work on various aspects of the project with a status check in 2018.  The goal is to have construction begin in 2019 with the pipeline operational by 2024 or 2025.

Alaska praises the step forward as the pipeline project could help bring economic certainty to the state amid declining oil production in the North Slope.

Houston Chronicle

Anadarko Petroleum to Cut Spending by $300 Million Amid Continued Low Oil Prices

Anadarko Petroleum Corp is the first major U.S. oil producer this year to announce plans to cut back on investment spending as oil prices stay below $50 a barrel.

The Woodlands-based oil and natural gas provider posted a second-quarter net loss on Monday of $415 million, or 76 cents a share.

The company plans to curb capital spending by $300 million this year while the oil market remains volatile.

Other oil producers in West Texas have also mentioned slowing activity if prices remained too low.

Houston Chronicle

Kinder Morgan Welcomes Aboriginal Investment in Trans Mountain Pipeline Expansion

Kinder Morgan Canada said Wednesday it welcomes investment from aboriginal communities so that they have a stake in the Trans Mountain pipeline expansion despite several aboriginal groups' fierce opposition to the project.

The Trans Mountain pipeline expansion would touch the lands of more than 100 aboriginal communities, some of which are against the pipeline project and have launched legal challenges against it.

Kinder Morgan has been working with aboriginal groups to build relationships with them based on trust and ensure them that pipeline construction would go smoothly.

The company said that getting aboriginal investment in Kinder Morgan is a challenge because of the substantial resources required but that the federal government can help the communities build that capacity.

The Trans Mountain pipeline has received both federal and regulatory approval but faces legal challenges raised by aboriginal groups as well as the Greens and New Democrats who sealed the deal to unseat the pipeline-supporting Liberal Party in British Columbia on May 9.


Phillips 66: Pipelines, Chemicals to Hold More Promise for Company than Gasoline

Two executives at Phillips 66 said last week that they see financial promise in the company's midstream and chemical business and are waning from the gasoline business.

Arguing that gasoline demand is on a decline, Phillips 66 CEO Greg Garland said at the company's annual shareholder meeting last Wednesday that the company sees "better value creation in the midstream and chemicals business" and that "the Middle East and U.S. Gulf Coast are going to be two best places in the world to make petrochemicals, long-term."

"In 10 years, if we're driving the same, we're going to see less need for transportation fuel," said Garland, adding that millennials are driving less and using ride-share companies more. He also mentioned that cars are becoming more fuel efficient.

As gas demand declines in the U.S., the shale boom is unleashing a large amount of natural gas, a building block for petrochemicals. The U.S. can produce natural gas at some of the cheapest costs in the world, and companies who invest in that can "compete with anybody, any place in the world," according to Garland.

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