Energy Transfer to Team Up with Multiple Companies and Build 600 Mile Permian Pipeline

Energy Transfer Partners is teaming up with Magellan Midsteam Partners and others as they plan a new 600-mile Permian pipeline system to Houston.

Dallas-based Energy Transfer and Oklahoma’s Megellan said they have partnered with Israel’s Delek Group and Ohio-based MPLX, which is the pipeline arm of Marathon Petroleum, to fund the construction of the multibillion-dollar pipeline project. They have confirmed that they have enough customer support to move forward.

The new partnership adds another project to the race to build crude oil pipelines from West Texas’ booming Permian Basin to refining and export hubs in Houston, Corpus Christi, and Beaumont.

Due to the lack of pipelines carrying oil, Permian oil drilling and well completions are slowing down. Until new pipelines start coming in the middle of 2019, companies are relying on trucks and trains to move crude.

The pipeline would come online in mid-2020 and would stretch to Magellan’s East Houston terminal and to Energy Transfer’s Nederland terminal near Beaumont.


Exxon Mobil, Plains All American Plan Pipeline Project in Permian

Exxon Mobil is planning to build hundred of miles of pipeline in a joint venture with Houston’s Plains All American Pipeline that would stretch from west of Midland to the Houston and Beaumont areas.

The multibillion dollar pipeline network will be designed to deliver crude oil from the Permian Basin to refining and port hubs near Houston.

This news comes after an early 2018 statement by Exxon that said it plans to triple production in the Permian by 2025.

Despite the proposed project, lack of pipelines in the prolific Permian is creating increasing bottlenecks in the area and could hamper growth as well as cause discounts on Permian-produced oil.

With Permian oil production at a record high and rapidly increasing, Plains and Oklahoma-based Magellan Midstream Partners expanded their BridgeTex oil pipeline from West Texas to the Houston region.


Energy Transfer Partners to Sell Business to USA Compression Partners in $1.8 Billion Deal

Energy Transfer Partners is selling its compression business to USA Compression Partners in an approximately $1.8 billion deal, which will help the pipeline giant fund more of its key pipeline growth projects.

The deal will also increase Dallas-based USA Compression Partners' size, almost doubling its compression capacity to 3.4 million.

USA Compression will acquire Energy Transfer's subsidiaries CDM Resource Management and CDM Environmental & Technical Services.

USA Compression CEO Eric Long said he is excited about the partnership between his company and CDM as it will continue to grow and deliver "exceptional customer service."

Fuel Fix

Phillips 66, Enbridge Partner to Build Massive Oil Pipeline in Permian

Phillips 66 and Enbridge are teaming up to build a crude oil pipeline from the Permian Basin to export and refining hubs near Corpus Christi, Houston, and Freeport, the companies announced Monday.

Houston-based Phillips 66 and Canada's Enbridge are soliciting interest this week from shipping customers and will finalize plans for the proposed Gray Oak Pipeline once they receive customer feedback and interest.

The Gray Oak Pipeline is expected to transport 385,000 barrels of oil a day with the potential to expand. It is estimated to be complete by late 2019.

The partnership between Phillips 66 and Enbridge offers this project plenty of experience and funding to make it possible, as Phillips 66 is one of the country's biggest refining and pipeline giants, and Enbridge has recently become North America's largest pipeline company after acquiring Spectra Energy earlier this year.

Fuel Fix

Kinder Morgan Sells Half of Equity Interest in Ohio Pipeline to Riverstone

Utopia Pipeline Route via the Utopia East Overview Site:

Kinder Morgan announced Tuesday that it sold 50 percent of its stake in the Utopia Pipeline Project to Riverstone Investment Group. The private equity firm agreed to an upfront cash payment that will reimburse Kinder Morgan for half of its prior capital expenditures related to the project.

Riverstone has also agreed to pay for its share of future capital expenditures that are necessary to complete and commission the project that is estimated at $500 million.

“This is another step towards achieving our stated goals of strengthening our balance sheet and positioning the company for long-term value creation. This agreement also demonstrates our ability to originate projects with attractive returns that partners are willing to pay to participate and invest in,” said Kinder Morgan president and chief executive officer Steve Kean.

The Utopia Pipeline will run for 215 miles from Harrison County, Ohio to Fulton County, Ohio and connect with an existing Kinder Morgan pipeline to transport ethane and ethane-propane mixtures to petrochemical companies in Ontario, Canada. The pipeline is planned for construction in November of this year and full service early 2018.

Kinder Morgan
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