Sendero Carlsbad Gateway Project Approved by FERC

The construction of the Sendero Carlsbad Gateway natural gas project in the Permian Basin was approved by Federal Energy Regulatory Commission. The project includes a 23 miles of 24 inch diameter pipeline with 400 Mmcf per day capacity between its Carlsbad processing plant and White Water Midstream's Agua Blanca pipeline.

The pipeline will expand upon Sendero's current 70 miles of 8 to 12 inch gathering system. The project will also include a new meter station within the existing Carlsbad Plant in Eddy County, a mainline block valve at milepost 15.0 in Eddy County, and a pig receiver and mainline block valve at milepost 23.3 near a White Water Midstream, LLC meter station in Culberson County.

Gateway will own all of the gas transported on the pipeline and has no plans to provide third-party transportation service. For that reason, FERC approved the company’s request to waive some of the regulatory obligations that are typically required of interstate pipelines that provide open-access service.


Goodnight Midstream Receives $500 Million for Expansion

Dallas-based private equity firm Tailwater Capital has committed more than $500 million for Goodnight Midstream to expand its oil field water operations. Goodnight Midstream is active in Bakken Shale of North Dakota, the Permian Basin of West Texas and Eagle Ford Shale of South Texas on moving produced water or saltwater and oilfield wastewater. 

"With this capital flexibility, we will continue to meet the increasing demand from our customers for scalable produced water infrastructure solutions and remain focused on providing safe, reliable and environmentally sustainable produced water logistics services to our customers," Goodnight Midstream Co-Founder and CEO Patrick Walker said in a statement. 

"With favorable market dynamics driving further investment in the produced water midstream sector, and the company's numerous customer contract wins, our team at Tailwater has strong conviction in Goodnight's industry leadership and continued success," Tailwater Capital Co-Founder and Managing Partners Edward Herring said in a statement. 

Dozens of saltwater disposal wells and hundreds of miles of produced water pipelines are operated by Goodnight Midstream in the Bakken Shale of North Dakota, the Permian Basin of West Texas and Eagle Ford Shale of South Texas. Two pipeline systems were put into service recently in the Permian Basin that will move 600,000 barrels of wastewater from oil and natural gas wells to disposal sites.


Midland to Echo System Expansion Announced

Expansion of the Midland to ECHO crude oil pipeline system was announced by Enterprise Products Partners L.P. The company will build a pipeline that connects the partnership’s 6 million bbl Midland, Texas storage facility to its ECHO Terminal through its Eagle Ford system in South Texas.

The company said it has long-term agreements that will support the expansion. The pipeline will have an initial capacity of 450,000 barrels per day and can be expanded up to 540,000 barrels per day.

The expansion will allow Enterprise to optimize its entire Midland to ECHO system, which will be comprised of four pipelines, by moving barrels in the most cost-efficient manner. It will also enable the partnership to maximize the operational flexibility of the Seminole Red pipeline in either crude oil or natural gas liquid service based on the needs of the respective markets.

This expansion project will also allow customers with crude oil and condensate production in both the Permian Basin and the Eagle Ford to maximize the value of their contracted pipeline capacity.


Nustar Energy Expects Crude Loadings to Double This Month

San Antonio-based NuStar Energy LP’s Corpus Christi, Texas, export terminal will double the crude loading by month’s end, Danny Oliver, a NuStar senior vice president, said in an interview. According to consultancy RBN Energy, the monthly average was 200,000 barrels per day this year and it reached to 280,000 barrels per day last week.

As new shale pipelines to the U.S. Gulf Coast opened last month, the crude arriving on EPIC Midstream and Plains All American Pipeline LP lines from the Permian Basin of West Texas and New Mexico increased.

NuStar expects loadings to reach up to 500,000 barrels per day by month’s end and up to 700,000 barrels per day by year-end. Last week, overall crude loadings at the Corpus Christi, Texas, export hub hit a record 1 million barrels per day.

“With our existing assets, we’ve been able to get 500,000-700,000 bpd with very little new capital,” Oliver said. “We have room to grow into our full capacity, it would just take building more barrels of storage.”

NuStar is set to finish constructing 600,000 barrels of new storage at the terminal by year-end. It may add another 1.5 million barrels of storage over about 15 months, with a total capacity of 5.4 million barrels.


Breakwater Energy Partners Launches Midstream Division

A new midstream division has been launched by Breakwater Energy Partners to build and operate pipelines and other equipment to move freshwater and wastewater to and from oil and gas sites in the West Texas shale play.

The company has already pushed to boost oilfield wastewater recycling in the Permian Basin and the move to launch the midstream division is to unify its water sourcing, transfer and recycling businesses under the Breakwater name

"We are looking forward to providing our customers even more solutions as we continue our commitment to the quality of our work, integrity and continuous improvement," Breakwater CEO Jason Jennaro said in a statement.

The company’s headquarter is in Houston and has more than 400 employees. It recycles more than 16.8 million gallons of oilfield wastewater per day and has more than 350 miles of lay flat hose and 140 transfer pumps.


Kinder Morgan Seeks Dismissal of Permian Highway Pipeline Lawsuit

The lawyers representing Kinder Morgan filed a motion on Tuesday asking a state district judge in Travis County to throw out the lawsuit against the pipeline operator’s Permian Highway Pipeline route. They assert that the Texas Constitution and state law uphold the company's rights.

Opponents filed a lawsuit stating that the pipeline route unfairly runs through residential areas of Kyle, about 20 miles south of Austin, near the Lyndon B. Johnson National Historical Park in Stonewall and less than a mile away from Jacob's Well, a popular summertime swimming hole near Wimberley.

"The lawsuit is a prime example of why eminent domain exists – to allow important infrastructure projects that provide significant public benefits," Kinder Morgan said in a statement.

The 423-mile pipeline project will move 2 billion cubic feet of natural gas per day from the Permian Basin of West Texas to the Gulf Coast. Kinder Morgan maintains that the project will unlock production bottlenecks in the Permian Basin. But members of Texas Real Estate Advocacy and Defense Coalition, or TREAD contend that no alternative routes were presented to the public or considered.



Oxy Wins Anadarko, Chevron Opted to Walk Away

Occidental Petroleum wins the nearly $40 billion bidding war for Anadarko Petroleum, while Chevron said it will bow out and doesn’t want to overpay. Oxy was determined to acquire Anadarko and its assets in West Texas' booming Permian Basin. The win will make Oxy as the Permian's top producer for the foreseeable future.

Initially Anadarko agreed to be bought by Chevron for $33 billion bid at $65 per share, but Oxy kept sweetening the deal until Anadarko could no longer say no for an offer of about $38 billion at $76 per share. Oxy critically increased the cash portion of its cash-and-stock bid from 25 percent to nearly 80 percent in order to assuage the concerns of many investors and to avoid a shareholder vote.

"Winning in any environment doesn't mean winning at any cost," said Chevron Chief Executive Michael Wirth. "Cost and capital discipline always matter, and we will not dilute our returns or erode value for our shareholders for the sake of doing a deal."

"We look forward to signing a merger agreement with Anadarko and realizing value for our shareholders as soon as possible," Oxy said Thursday in a prepared statement after Chevron backed out. Chevron walks away with a $1 billion breakup fee.


Open Season for Kinder Morgan and Phillips' 850-Mile Gray Oak Pipeline Announced

Phillips 66 and Kinder Morgan Inc., announced an open season on Monday for shipper commitments for its Gray Oak Pipeline.

The Gray Oak Pipeline stretches from the Permian Basin to delivery points at or near the Houston Ship Channel and capable for crude deliveries of 900,000 barrel per day.

According to an analyst, The Gray Oak Pipeline could help alleviate a crude oil transportation bottleneck in the Permian Basin of West Texas and New Mexico.

Through a connection in South Texas, The Gray Oak Pipeline would deliver crude to the Houston area.


Kinder Morgan and EagleClaw Authorize $2 Billion Permian Highway Pipeline

Kinder Morgan and Midland-based EagleClaw Midstream said they’ve authorized the proposed $2 billion Permian Highway Pipeline project to transport natural gas from West Texas to Houston and other hubs.

Exxon Mobil and Houston-based Apache Corp are both major customers of the project. Apache Corp also has the option of buying a one-third stake in the pipeline through its proposed spinoff company, Atlus Midstream. Kinder Morgan and EagleClaw are currently 50-50 partners.

"With the continued growth in drilling activity in the Permian Basin, this project will help to provide key infrastructure for producers to move natural gas to the best premium markets along the Gulf Coast and South Texas," said EagleClaw President Jamie Welch.

The PHP Project will serve as an additional outlet for the increase in natural gas production that links the Permian Basin to the growing markets that stretch across the Texas Gulf Coast.

The project would transport a maximum of 2 billion ft^3/d of natural gas that crosses 430 miles of 42-inch pipeline from the Waha, Texas area to US Gulf Coast and Mexico markets.

Kinder Morgan is also looking at the feasibility of a 48-inch pipeline to increase transportation capacity. 

The project is expected to be in service in late 2020.



Kinder Morgan to Join EagleClaw Midstream, Apache Corporation in Permian Highway Pipeline Project

Kinder Morgan Texas Pipeline LLC, EagleClaw Midstream Ventures, and Apache Corporation made an announcement yesterday that they signed a letter of intent to develop the proposed Permian Highway Pipeline Project (PHP Project).

The PHP Project will serve as an additional outlet for the increase in natural gas production that links the Permian Basin to the growing markets that stretch across the Texas Gulf Coast.

The project would transport a maximum of 2 billion ft^3/d of natural gas that crosses 430 miles of 42 inch pipeline from the Waha, Texas area to US Gulf Coast and Mexico markets.

Kinder Morgan is also looking at the feasibility of a 48-inch pipeline to increase transportation capacity. 

The project is expected to be in service in late 2020.

World Pipes


Targa Resources to Build 635-Mile NGL Pipeline in Texas

Energy company Targa Resources plans to build a 635-mile natural gas liquids pipeline in Texas from the Permian Basin to Mont Belvieu.

The pipeline, called "Grand Prix," will transport natural gas from the Permian Basin and from Targa's North Texas system to the company's fractionation and storage complex in the Mont Belvieu NGL market hub.

The pipeline will mostly run through gateways where other pipelines already exist. Some additional land acquisition is possible, but that information will not be known until surveying is complete.

Grand Prix will have a capacity of about 300,000 barrels per day and will be expandable up to 550,000 barrels per day.

The pipeline is expected to be in service by the second quarter of 2019.

"We are excited to be moving forward with Grand Prix, which will enhance our ability to move our customers' volumes from the wellhead in the Permian Basin and North Texas to key petrochemical and export markets," said CEO of Targa Joe Bob Perkins.

Houston Chronicle

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

Enterprise Products Partners Talks of Expanding Capacity of its Midland-to-Sealy Crude Pipeline

Enterprise Products Partners said on Wednesday that plans are underway to potentially expand capacity on its Midland-to-Sealy crude oil pipeline by more than 20 percent as a way to transport even more oil from the booming Permian Basin.

Flows on the pipeline averaged 330,000 barrels per day when it came online in November and are expected to hit 450,000 barrels per day as soon as April when the pipeline is fully operational.

The company said studies are being done to measure exactly how much the pipeline capacity can be increased. Currently the company has an increased estimate of 540,000 to 550,000 barrels per day.

Enterprise's announcement to potentially increase capacity on its Midland-to-Sealy pipeline comes as ExxonMobil and other players map out growth for Permian operations, which would demand more transport to move the crude to refining and export facilities near the Gulf Coast.

Enterprise is also building an ethylene pipeline from Mont Belvieu to Bayport, Texas and expects the project to be in service in 2020.


U.S. Oil Production to Surpass Levels Not Seen Since 1970, the EIA Reports

U.S. crude oil production is expected to rise above 10 million barrels per day next month, the highest level of oil production seen in the U.S. since 1970.

Production levels that high were not expected to be reached in the U.S. until the fourth quarter of this year, but the Energy Information Administration (EIA) said in a report Tuesday that the expected production increase to 10.04 million barrels per day would be reached in February.

A monthly average of more than 10 million barrels per day has not been seen since 1970 in the U.S. Since then, levels decreased as the U.S. began to more heavily rely on imported crude. But that dependence changed over the last few years due to the shale revolution.

In its report, the EIA estimates that U.S. output will continue to increase to more than 11 million barrels per day by the end of 2019.

Much of the growth will be seen in the Permian Basin, which is well supplied with pipelines and projects in progress that will help maintain capacity increase.


Andeavor Acquires RIO Pipeline System Operator Rangeland Energy II

Andeavor has agreed to acquire 100% of Rangeland Energy II, which owns and operates the 110-mile RIO crude oil pipeline system and hub in the Delaware Basin.

The transaction is expected to close in the first quarter of 2018 for an undisclosed amount.

The purchase of Rangeland Energy II will further enhance Andeavor's Permian Basin position as Andeavor plans to integrate the acquired pipeline system and hub with the nearby Conan crude oil gathering system.

Staff at Rangeland Energy II will be invited to stay on as Andeavor employees.

Business Wire

Kinder Morgan, DCP Midstream, Targa Resources Move Foward with GCX NatGas Pipeline

Kinder Morgan, DCP Midstream, and Targa Resources today announced a final investment decision to move forward with the $1.7 billion Gulf Coast Express Pipeline Project (GCX Project) that will transport up to 1.92 billion cubic feet daily of natural gas.

The announcement comes after the companies solidified joint venture agreements and secured enough transportation agreements with shippers.

The mainline portion of the GXP Project will run for 447 miles from the Waha Hub in the Permian Basin to Agua Dulce, Texas. An additional 50-mile Midland Lateral portion and associated compression will connect with the GCX Project.

Construction on the project is expected to begin in the first quarter of 2018, and the companies hope to begin service on the pipeline in October 2019. Kinder Morgan will own 50 percent of the project while DCP Midstream and Targa Resources each own 25 percent.

Business Wire

Plains All American Pipeline Moving Forward With Planned Cactus Pipeline Expansion

Plains All American Pipeline is seeking customers to build its planned Cactus II Pipeline that will originate in the Permian Basin and terminate in Corpus Christi to export crude to market.

The project will expand Plains' existing Cactus network with two additional pipelines, bringing crude capacity from 390,000 barrels per day to up to 575,000 barrels per day.

The original Cactus Pipeline is currently the only major pipeline connecting the Permian to Corpus Christi, but competition is rising as more pipeline companies plan projects to build their own pipelines from West Texas to the Corpus area.

The Cactus II Pipeline is expected to be completed by the fall of 2019.

Houston Chronicle

Enterprise Products Partners to Convert NGL Pipeline in Permian Basin to Crude Oil Service

Enterprise Products Partners is converting one of its natural gas liquids pipelines in the Permian Basin to crude oil service, bringing Enterprise's total crude oil pipeline capacity to more than 650,000 barrels per day from the Permian Basin to its crude oil hub in the Houston area.

The conversion is expected to be complete in the first half of 2020.

The conversion is the company's response to a "strong demand for crude oil transportation, storage, and marine terminal services for crude oil production from the Permian Basin," said CEO of Enterprise Jim Teague.

Enterprise is constructing its Shin Oak NGL pipeline that will take NGL volumes from one of the company's current NGL pipelines in the Permian Basin so that it can be used for crude transportation. Enterprise is currently evaluating which of its three current NGL pipelines in the area to repurpose.

Business Wire

First Phase of Construction on EPIC NGL Pipeline Begins

Construction on the first phase of the 650-mile EPIC natural gas liquids pipeline has officially begun.

The project runs from southeast New Mexico to Corpus Christi and will be side-by-side through Texas with the previously announced 730-mile EPIC Crude Oil Pipeline for most of its route.

EPIC plans to have the first phase of the pipeline in service by early 2018 and the entire pipeline complete by early 2019. The pipeline will have a throughput capacity of at least 375,000 barrels per day with many origin points in the Delaware and Midland basins.

BP announced in September that it has signed on as the anchor shipper on the New Mexico-to-Texas EPIC NGL pipeline.

Houston Chronicle

Targa Resources Teams Up With Kinder Morgan on 430-Mile NatGas Pipeline

Targa Resources and Kinder Morgan are working together to build the 430-mile Gulf Coast Express natural gas pipeline from the Permian Basin to Corpus Christi.

The project is being led by Kinder Morgan, and Targa Resources is buying a 25 percent stake while also selling 25 percent of its proposed Grand Prix natural gas liquids pipeline project to equity firm Blackstone Energy Partners.

Kinder Morgan will own 50 percent of the Gulf Coast Express Pipeline, and DCP Midstream has the remaining 25 percent.

The project is expected to be complete by late 2019.

DCP Midstream was founded by Phillips 66 and Spectra Energy. Enbridge acquired Spectra Energy this year, so it now also owns DCP Midstream with Phillips 66.

Houston Chronicle