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

Two Expansion Projects in Texas Will Boost Exports to Mexico

Completion of a pair of expansion projects in Port Arthur and Corpus Christi by Howard Energy Partners will allow the company to do more exports of crude oil, gasoline diesel and other products to Mexico.

"Substantial expansions at our Port Arthur and Corpus Christi facilities signify HEP's commitment to designing and constructing fully-engineered facilities that are tailored to meet the exact needs of our customers," Howard Energy Partners Co-Founder and President Brad Bynum said in a statement.

The company will get 2.6 million barrels of storage in the region after the completion of the expansion projects, which recently added 12 new storage tanks, four butane bullets, two barge docks, one ship dock and a bidirectional pipeline to its 450-acre Port Arthur terminal.

The expansion projects are expected to boost the company's exports by rail and seafaring tankers, as Mexico has emerged to be one of Howard's top customers.

Source:
chron

Kinder Morgan’s Steel Tariff Waiver Request Denied by Trump Administration

The Department of Commerce denied two requests from Kinder Morgan to buy tariff-free steel pipes from Turkish manufacturer Borusan Mannesmann in order to build the $1.75 billion Gulf Coast Express Pipeline in Permian Basin.

The company have a target service date of October 2019 for the 514-mile pipeline to move 2 billion cubic feet of natural gas per day from the Permian Basin of West Texas to the Agua Dulce hub near Corpus Christi.

Trump imposed a 25 percent import tax on steel and a 10 percent import tax on aluminum on most countries and extended them in June to Mexico, Canada and the European Union, in a decision taken on March 2018.

The company argued that the Gulf Coast Express Pipeline would boost exports, unlock more oil production in the Permian Basin. They also added that it will strengthen ties to Turkey, a key U.S. ally in the Middle East, but according to the Department of Commerce officials, there is a reasonable amount of pipeline available in the United States with "satisfactory quality" for the project.

Source:
chron

Cameron LNG Reaches Final Stage of Train 1 Commissioning

Sempra Energy's Cameron LNG export terminal in Louisiana has reached the final stage of the startup process known as commissioning for its first production unit. The company is planning to construct three production units in total, which are known in the industry as trains at the Cameron LNG export terminal.

Joint venture with the general contractors McDermott International and Chiyoda International Corp. have started introducing natural gas from a pipeline feeding the facility into Train 1 of the liquefied natural gas plant, which signals the end of the construction phase of the project and is regarded as a precursor of LNG production.

"We are extremely proud of the Cameron LNG project team for this achievement and their remarkable safety performance," McDermott International Senior Vic President Mark Coscio said in a statement. "Their accomplishment is more than just a project milestone; it is an impressive feat of engineering and construction. Once Train 1 is fully operational, it will have the capacity to produce 4 million tonnes of LNG per year."

Cameron LNG began commercial operations in July 2009 as a $900 million LNG import terminal, but later Sempra Energy decided to take advantage of record natural gas production from U.S. shale basins to redevelop the Hackberry, Louisiana facility into an export terminal.

In addition to Cameron LNG, the company is also developing the Energia Costa Azul LNG facility in Baja California, Mexico and is seeking to develop the Gulf Coast LNG terminal near Port Arthur.

Source:
chron

Energy Transfer’s Natural Gas Pipeline Ruptures in Missouri

Panhandle Eastern’s fiery rupture of a natural gas line lit up the early-morning sky about one mile north of Mexico, Missouri on Sunday. This will limit the capacity while repairs are being done, Energy Transfer said in a notice.

The rupture took place downstream from the Centralia Compressor Station and occurred about 120 miles from St. Louis. Although the rupture didn’t cause serious injuries, it did interrupt power to several homes, the Audrain County Sheriff’s Office noted in a Facebook post.

It took about 40 minutes for the fire to burn the remaining gas and extinguish itself. The flames were so intense that the crews weren't able to battle the blaze when they first arrived, said Little Dixie Fire Protection District Fire Chief Steve Gentry.

In order to clear the debris blown into the air by the explosion, Missouri 15 highway was closed for several hours. The highway was repaired and utility crews replaced several poles and lines. The cause of the explosion is unknown.

Sources:
bloomberg
chron

Mexico's President Looking to Revise Contracts with Private Pipeline Companies, TransCanada and Sempra Energy both Involved

Mexico’s President Andrés Manuel López Obrador said the Mexican government wants to revise natural-gas pipeline contracts with private companies where the state-owned electric utility is paying for fuel it has not received yet.

He said Grupo Carso , a conglomerate controlled by billionaire Carlos Slim, Sempra Energy ’s unit Infraestructura Energética Nova, or IEnova, and TransCanada are among the companies that are involved.

On Monday, the president lashed out at former government administrations and energy officials for “decimating the state power utility” through the privatization of the energy sector.

The current president is highly critical of any changes that would result in a reduction of the state’s control of the sector.

He added that there are currently seven nonworking pipelines for which the state-owned electric utility is paying. Under those contracts, the utility guarantees that it will use capacity on the pipelines and also has to pay if projects are interrupted for reasons beyond the control of the companies.

Despite this affecting the utility’s finances, the president hopes to reach voluntary agreements with companies to revise contracts without heading towards legal battles.

TransCanada said it welcomes the opportunity to work with CFE and the Mexican government to solve issues preventing the completion of projects in Mexico. But the payments are part of force majeure provisions included in the pipeline contracts, not fines or subsidies, TransCanada said. “Our commitment to Mexico is as strong as when we first arrived over 20 years ago”, TransCanada added.

Source:
The Wall Street Journala

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.

Source:
Chron

Plains, Exxon, Lotus Team Up for 650-Mile West Texas to Houston Pipeline

Plains All American Pipeline, Exxon Mobil and Lotus Midstream LLC finalized a joint venture to start a 650-mile pipeline project, per an announcement on Wednesday.

The companies are planning to build the 650-mile project using 36-inch-diameter pipe to carry more than 1 million barrels of oil and condensate per day. Analysts believe the project costs will be in the $2 billion region.

Pipeline capacity has caused a problem for companies needing to move their product to market in the Gulf, but the Wink-to-Webster pipeline looks to help alleviate some of those issues.

The companies said that the pipeline operator Plains will lead the construction of the pipeline, which will start operations in the first half of 2021.

Source:
Chron

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.

Source:
Chron

Pemex Pipeline Leak Takes the Lives of at Least 109 People in Mexico's Tlahuelilpan District

A devastating pipeline explosion took the lives of at least 109 people while hospitalizing another 50 in Mexico.

The Mexican security minister said that Pemex did not close the valve at a leaking gasoline pipeline when first notified because it was not initially thought to be an “important” leak.

The explosion took place on Friday in the Hidalgo state’s Tlahuelilpan district where 800 people were collecting fuel from the major pipeline’s leak.

Reports say that the leak was initially manageable. Some explained it as a small fountain where people gathered to collect the fuel and give it to “runners”. As the crowd grew, so did the risk.

An individual rammed a piece of metal to create a much larger leak. The fire that engulfed those around the leak is part of an ongoing issue of fuel theft in Mexico. Last week, the President of Mexico added 4,000 soldiers to patrol the major pipelines.

Security Minister Alfonoso Durazo explained that the Mexico’s military detected the leak four hours before Pemex close the valve.

Source:
Oil and Gas Investor
CBS

Mexico's President Making Strong Stance Against Fuel Theft - Adds 4,000 Troops to Safeguard Pemex Pipeline

President López Obrador has made combating fuel theft an early priority for his government and announced yesterday that he will add 4,000 troops to safeguard Pemex pipelines against theft.

With 4,000 soldiers and marines already on guard at Mexico’s oil refineries and other facilities as part of the federal government’s anti-fuel theft strategy, President López Obrador wants to continue to “implement actions that are necessary”.

“We’re going to strengthen surveillance of 1,600 kilometers of pipelines . . . the six main pipelines. . . We’re going to confront this scourge,” López Obrador told reporters at his daily press conference at the National Palace in Mexico City.

He added that surveillance bases will be set up along the pipeline network from which the military will continue to carry out their anti-fuel theft operations.

López Obrador also called on people complicit with fuel thieves known as huachicoleros to stop supporting the crime.

“I ask the members of the communities and the towns through which the pipelines run to help us. If before, due to a lack of opportunities, you collaborated with those who devote themselves to stealing fuel, don’t do it anymore, don’t be complicit,” he said.

 “Things have changed now. Public servants don’t steal the people’s money anymore and nobody should dedicate themselves to robbery. If you earned income by participating in illegal activities, now you’ll get those same resources in a clean way through [government] programs and scholarships,” the president added.

Source:
Mexico News Daily

TransCanada to be Renamed to TC Energy

TransCanada announced on Wednesday that it will change its name to TC Energy.

After years of building hundreds of miles of oil and gas pipelines in both the United States and Mexico, TransCanada has decided to change its name to TX Energy to better reflect its performance as a major pipeline and power generator for all of North America.

"TC Energy better reflects the breadth of our business and acknowledges our proud history of safely and responsibly delivering the energy that millions of North Americans rely on every day," said TransCanada Chief Executive Russ Girling.

The decision will require shareholder approval. TransCanada intends to continue trading under “TRP” after adopting the new name.

Source:
Chron

$1 Billion Worth of Pipeline Projects Halted in Central Mexico Due to Alleged Extortion

TransCanada has halted their combined $1 billion pipeline projects in Central America. The company cited numerous delays, runaway costs and alleged acts of extortion for their two natural gas pipelines.

The construction was halted in the state of Hidalgo on the Tuxpan-Tula Pipeline and the Tula-Villa de Reyes Pipeline, an open letter published in several Mexican newspapers by the company’s Mexican subsidiary said.

"The social and legal uncertainty that prevails in this state makes the continuity of our investments impossible," the company wrote in the statement. "On multiple occasions, social groups have made irrational requests that border on extortion and have performed acts outside the law."

As a part of the two nation’s historic energy reforms, TransCanada won contracts with the Mexico state-owned power company to build two pipelines – both consisting of $500 million contracts each. The initial contract was for the 163-mile Tuxpan-Tula Pipeline that would move natural gas from the coastal state of Veracruz to power plants in Hidalgo. In the following months, the company received an April 2016 contract to build another pipeline to move natural gas from Tula to the State of San Luis Potosi.

TransCanada also reported that it is facing legal uncertainty and higher than expected costs to obtain permits from various municipalities.

A clause in the contract permits TransCanada to collect revenue on the pipeline as long as delays are not from TransCanada’s doing.

Source:
Houston Chronicle

Enbridge Puts Texas to Mexico NatGas Pipe into Service

Enbridge announced on Friday that its Texas to Mexico, $1.6 billion Valley Crossing natural gas pipeline entered service on Oct. 31.

The project is designed to carry up to 2.6 billion cubic feet per day through the 165-mile pipe from Texas to Mexico as demand for power generation shifts from plants being powered by fuel oil to imported liquefied natural gas.

Valley Crossing connects in the Gulf of Mexico with the Sur de Texas-Tuxpan pipeline. The Sur de Texas-Tuxpan pipeline runs roughly 500 miles in Mexico, making it the biggest gas pipe between the two countries.

According to Enbridge’s website, the project has been under construction since April 2017.

Source:
Reuters


 

Cheniere Energy Requests Permission to Bring Billion Dollar Midship NatGas Pipeline in Oklahoma Into Service

Cheniere Energy Inc asked U.S. energy regulators on Friday for permission to start working on their $1.025 billion Midship natural gas pipeline in Oklahoma.

The company asked the FERC for authorization to start building the proposed 234-mile pipeline in three segments. The project is expected to be complete by early 2019, Cheniere said.

Midship is designed to deliver 1.44 billion cubic feet per day (bcfd) of gas from the Anadarko basin to existing pipelines near Bennington, Oklahoma to transport liquefied natural gas to Gulf Coast and Southeast markets.

Expectation of total U.S. LNG export capacity should rise to 8.3 bcfd by the end of 2019 and 9.6 bcfd by the end of 2020 from 3.8 bcfd now.

Most of the U.S. LNG export terminals are located or being built along the Gulf of Mexico in Louisiana and Texas

Source:
Reuters

New Pipelines Expected in Coming Months Will Boost Natural Gas Exports To Mexico

U.S. natural gas exports to Mexico by pipeline are expected to jump in the coming months as four major pipelines are scheduled to begin commercial operations by the end of the year, according to U.S. Energy Department reports.

The pipelines will supply Mexico’s power generation and industrial sectors with Mexico emerging as one of the largest customers of U.S. natural gas after overhauling its energy policies five years ago.

The pipelines include Enbridge’s Nueces-Brownsville project in the Rio Grande Valley as well as three projects in Mexico. They are expected to start up in October and November and will help bring gas from West Texas, where there is a pipeline shortage, and elsewhere in the state to central and western Mexico.
 
Exports have already ramped up in recent months. Last month, natural gas shipments to Mexico by pipeline exceeded a billion cubic feet per day for the first-time.

Source:
Houston Chronicle

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.

Source:
Houston Chronicle

Enbridge Starts Construction of Valley Crossing NatGas Pipeline at Tex-Mex Border

Enbridge has started construction of the offshore border crossing section of its $1.6 billion Valley Crossing natural gas pipeline between Texas and Mexico, according to a U.S. federal filing.

The construction involves a 1000-foot section of offshore pipe that extends to the U.S.-Mexico border. The onshore sections of the pipeline have been completed.

The Valley Crossing pipeline is designed to carry up to 2.6 million cubic feet per day of gas from Texas to help Mexico meet its growing power demands.

The pipeline will connect in the Gulf of Mexico to the Sur de Texas-Tuxpan pipeline that is currently under construction. When complete, it will be the biggest gas pipeline between the two countries.

Enbridge said the pipeline remains on track to enter service in October.

Source:
Reuters

Magellan Midstream Considers Expansion of its Texas Refined Products Pipeline System

Magellan Midstream is considering expanding its refined products pipeline in Texas and has launched an open season to assess customer interest.

The proposed expansion would be of the western leg of the pipeline system and would increase Magellan's capacity to transport refined petroleum products from Gulf Coast refineries to demand centers in Abilene, Midland/Odessa, and El Paso, Texas. The expansion would also allow the option to access markets in New Mexico, Arizona, and Mexico by way of connections to other pipelines.

The expansion would increase the pipeline's current capacity of 100,000 barrels per day to 140,000 barrels per day.

The expansion is estimated to be operational by mid-2020 if Magellan receives optimal bids and the project passes all necessary regulatory approvals.

Source:
Business Insider

Mexico to Auction Shale Blocks for First Time Ever in September

Mexico is auctioning development rights to shale blocks this September, the first time the country has offered private oil companies the chance to develop the resource.

The nine shale blocks are located in the Burgos Basin, where state-owned Pemex has drilled about 20 exploratory wells in the past. The blocks are believed to mostly contain natural gas.

Winners of the blocks will "have the right to explore and carry out activities at any depth, throughout the column, involving shale formations as well as conventional sand formations," said Juan Carlos Zepeda, President of Mexico's National Hydrocarbons Commission.

But with the shale production will come challenges as Mexico is burdened by gang violence on land where shale lies and also lacks the pipeline infrastructure to handle shale projects.

Source:
Reuters