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.

Source:
chron

Philips 66 Enters Joint Venture to Build $2.5 Billion Red Oak Pipeline

Phillips 66 has teamed up with Plains All American Pipeline LP to construct the $2.5 billion Red Oak Pipeline system that will deliver crude oil from Cushing, Oklahoma, and the Permian Basin in West Texas to Corpus Christi, Ingleside, Houston and Beaumont, Texas.

The plan is to build a 30-inch pipeline from Cushing to Wichita Falls and Sealy, Texas. It also will build a 30-inch pipeline segment from Sealy to Corpus Christi and Ingleside and a 20-inch pipeline segment from Sealy to Houston and Beaumont.

The company expects to commence initial service as early as the first quarter of 2021. As per the release, Plains will handle project construction and Phillips 66 will operate the pipeline.

“Red Oak represents a capital-efficient industry solution that will utilize existing assets and provide pull-through benefits to our systems,” Willie Chiang, CEO of Plains All American, said in the release. “We look forward to working closely with Phillips 66 and our committed shippers to bring Red Oak into service and further optimize our assets upstream and downstream of the new pipeline system. We also look forward to creating jobs and supporting economic growth in Oklahoma and Texas.”

Source:
bizjournals

Joint Venture to Construct 475 Mile Whistler Pipeline

A final investment decision to design and construct the proposed Whistler pipeline was taken by MPLX, WhiteWater Midstream and Stonepeak Infrastructure Partners/West Texas Gas, Inc.

The 475 mile long pipeline from the Permian Basin in West Texas to the state’s Coastal Bend region will be built by the joint venture, MPLX reported late Wednesday.

The pipeline will be designed to carry approximately 2 billion cubic feet per day of gas through a 42 inch diameter pipe from Waha, Texas, to the Agua Dulce area in South Texas.

The majority of available capacity on the proposed pipeline has been subscribed and committed by long-term transportation agreements and the remaining capacity will be fully subscribed in the coming months.

“The decision to move forward with this project after securing sufficient commitments from shippers demonstrates our disciplined approach to investing,” MPLX President Michael J. Hennigan said in a written statement. “Whistler is expected to provide reliable residue gas transportation out of the Permian Basin, which is vital to our growing gas processing position and producers in the region.”

The pipeline is expected to begin service during the third quarter of 2021, subject to pending regulatory and other approvals.

Source:
rigzone

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.

Source:
chron

 

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.

Source:
chron

Occidental’s Bid Picked by Anadarko Pressuring Chevron to Respond

Anadarko Petroleum said on Monday that it is going with the acquisition offer offered by Occidental Petroleum's jilting Chevron. Now Chevron has four days to up its offer or walk away with the $1 billion breakup fee negotiated in its earlier merger agreement with Anadarko.

Chevron and Anadarko previously agreed to a deal with Anadarko valued at $65 per share and Chevron offered $33 billion to buy Anadarko, but Occidental offered about $38 billion at $76 per share.

"Oxy seems desperate to get this deal done," said Jennifer Rowland, an energy analyst with the financial services company Edward Jones. "They're like a pit bull that bites on and just won't let go."

Comparing to Chevron, Occidental is much smaller, but Occidental has proven itself determined to complete a deal it has pursued for nearly two years. Anadarko have extensive holdings in the Permian Basin oil field in West Texas, where both Occidental and Chevron are leading producers.

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

Stonepeak Buys Oryx Midstream in a $3.6 Billion Deal

In a $3.6 billion deal, New York private equity firm Stonepeak Infrastructure Partners bought all of Permian Basin-focused pipeline operator Oryx Midstream’s assets, the two companies announced the deal on Tuesday.

Oryx is publicized as the largest privately-held crude oil pipeline and storage terminal operator in the Permian Basin of West Texas and New Mexico, with more than 1,200 miles of pipeline and 2.1 million barrels of storage.

"As we begin our next chapter and new partnership with Stonepeak, we look forward to the operational and capital support they will provide our team as we continue to aggressively grow our footprint in the Permian Basin," Oryx Midstream CEO Brett Wiggs said in a statement.

"Our critical focus will be on continuing to provide Oryx's diversified customer base with best in class service offerings to accommodate their growing production while also pursuing new commercial opportunities across the value-chain," Stonepeak partner and energy business head Jack Howell said.

The Midland pipeline operator recently completed construction on the first phase of a crude oil gathering system in an area of the Permian Basin known as the southern Delaware Basin, which includes parts of southern New Mexico and West Texas. Oryx will be able to keep its name and headquarters in Midland, under the deal with Stonepeak.

Source:
chron

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.

Source:
Reuters

Two Permian Saltwater Pipelines Placed in Service

Goodnight Midstream announced that its Llano Pipeline System in New Mexico and its Rattlesnake Pipeline System in West Texas are now in commercial service and will move a combined 600,000 barrels of wastewater or produced water from oil and natural gas wells in the Permian Basin to disposal sites.

Produced water is an industry term used to describe the water that surfaces as a byproduct of oil and natural gas production.

The Llano Pipeline System includes 45 miles of gathering pipelines which will move produced water from oil and natural gas wells in Lea County, New Mexico to three saltwater disposal wells.

The Rattlesnake Pipeline System includes 25 miles of gathering pipeline that will move produced water from oil and natural gas in Ward County, Texas to nearby disposal sites.

Goodnight Midstream, which was formed in 2011 operates produced water pipelines and saltwater disposal wells in the Bakken Shale of North Dakota, the Permian Basin, and Eagle Ford Shale of South Texas.

Source:
Chron

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.

Source:
Reuters

 

600-Mile Permian Gulf Coast Pipeline to Cost Nearly $2 Billion

Magellan Midstream Partners LP projected on Wednesday it would spend nearly $2 billion to construct a proposed crude oil pipeline from the Permian Basin in West Texas to the U.S. Gulf Coast. 

"We have binding commitments that give us very attractive economics. But what we don't know is the full demand," which would dictate the project’s final cost, Magellan's chief executive Michael Mears said at the Barclays energy conference in New York. 

The project cost for the Permian Gulf Coast pipeline won’t be made clear until after shippers commit to volume capacity during the open season, Mears said. The bidding process for additional shipper commitments will be launched later this week.

The new partnership by Magellan, Energy Transfer Partners, and others 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.

Source:
Reuters

EagleClaw Midstream To Pay $950 Million to Buy Rival Caprock

Blackstone-backed pipeline company EagleClaw Midstream Ventures LLC said on Wednesday it would buy rival Caprock Midstream Holdings for about $950 million.

Midstream companies are investing in the Permian Basin as a surge of oil and gas production has outstripped transport capacity.

EagleClaw will buy Caprock from Dallas-based private equity firm Energy Spectrum Capital and Caprock Midstream Management.

Caprock will be renamed to EagleClaw Midstream II and operate as a sister entity to EagleClaw after the deal closes this year.

EagleClaw Midstream is a portfolio company of Blackstone Energy Partners, Blackstone’s energy-focused private equity business.

Source:
Reuters

Kinder Morgan Adds Exxon Mobil as Major Customer for Permian Highway Pipeline

Kinder Morgan has added on Exxon Mobil as a major customer for its planned $2 billion Permian Highway Pipeline that will carry natural gas from West Texas to the Houston region.

Exxon is looking for more outlets to transport its natural gas from the rapidly increasing Permian Basin production. A lot of valuable associated gas comes out of the Permian despite crude oil being the main focus of production.

Kinder Morgan proposed the Permian Highway Pipeline project in June as they partnered with Midland-based EagleClaw Midstream. Eagle claw is financially backed by the private equity giant Blackstone Group out of New York.

The goal is to have the pipeline open by the end of 2020. Route details are still being finalized, but the main uses for the project include supplying gas for electricity generation in Texas and Mexico as well as supplying new liquefied natural gas export complexes currently under construction in Freeport and Corpus Christi.

Source:
Houston Chronicle

Medallion Midstream Asks for Bids for New Expansion

Irving-based Medallion Midstream announced an open season on Monday and is asking for bids as it anticipates a planned expansion.

The West Texas crude oil pipeline system will make a major expansion in the Midland Basin. The oil field is part of the larger Permian Basin, which has seen enormous growth in oil and gas production over the last few years.

Medallion said that the plan was to place new 16-inch pipes along its existing pipeline system, without specifying how many miles would be added, nor the capacity.

Currently, the system runs approximately 700 miles of six-inch diameter pipe.

The expansion comes a week after Oryx Midstream Services announced its own expansion of regional crude oil pipeline in which it will add 180 miles to its existing system.

Source:
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.

Source:
Fuel Fix

Kinder Morgan's 270-Mile Utopia Pipeline Now in Service in Ohio

Source:  Utopia Pipeline

Kinder Morgan's 270-mile Utopia pipeline system was placed into service Tuesday and now carries 50,000 barrels per day of ethane products from eastern Ohio to Windsor, Ontario.

The $500 million system, which capitalizes off Ohio's Utica shale play, could be expanded to transport as many as 75,000 barrels per day.

Kinder Morgan is also planning growth in West Texas with a proposed $1.7 billion gas pipeline from the Permian Basin to Corpus Christi in partnership with two other pipeline companies.

The Permian-to-Corpus project is expected to begin operating by October 2019, joining many other planned pipeline projects in the area as the Permian Basin booms.

Source:
Fuel Fix

Enterprise Products Partners to Expand NGL Facilities in Midst of Permian Boom

Enterprise Products Partners announced it is further expanding its natural gas liquids facilities in the Houston area and West Texas to take advantage of the boom that forecasts the potential doubling of natural gas and NGL supply in the Permian within the next five years.

Enterprise will expand its butane refining capabilities at its Mont Belvieu complex and continue constructing its new NGL processing plant in Orla.

Enterprise plans to add 300 million cubic feet per day of capacity at its cryogenic natural gas processing facility near Orla as well as add 30,000 barrels per day of processing capacity to its butane isomerization facilities in Mont Belvieu.

Enterprise is also in the middle of constructing its 571-mile Shin Oak pipeline to transport more NGLs from West Texas to Mont Belvieu.

Source:
Houston Chronicle

New Permian Oil Production to be Exported as Foreign Demand for U.S. Oil Rises

Most new crude oil produced in Texas' Permian Basin over the next several years will be exported from Gulf Coast ports to nations like Asia and other growing regions as foreign demand for U.S. oil continues to rise.

Domestic oil consumption may only be rising slightly, but foreign demand is booming ever since the 2015 end of a decades-old ban on crude exports.

Today, the U.S. ships almost 1 million barrels of oil each day, and that number is expected to triple by 2025, according to Kurt Barrow, a vice president of oil markets for IHS Markit.

The increase in exports will be fed mainly by Permian production and shipped from ports like Houston and Corpus Christi.

There are several pipelines proposed to carry crude oil from West Texas to Corpus. There are also new oil pipelines and pipeline expansion projects under construction from the Permian to Houston by companies like Enterprise Products Partners, Plains All American Pipeline, and Magellan Midstream Partners.

The amount of oil pipeline projects in the works could bring the Permian's crude pipeline capacity to nearly 5 million barrels by 2020.

Source:
Houston Chronicle

Investor Blackstone to Purchase Pipeline Assets in Permian for $2 Billion

Leading investment firm Blackstone Group will acquire pipeline company EagleClaw Midstream Ventures for approximately $2 billion, joining the rise of pipeline buyers in the booming Permian Basin.

In the transaction expected to close by end of July, Blackstone will acquire more than 375 miles of natural gas pipelines from EagleClaw, the largest privately held midstream operator in the Permian's Delaware Basin.

EagleClaw will keep its name and leading staff under the purchase and will operate as a Blackstone portfolio company.

“As we begin a new chapter, we will continue to deliver the same outstanding level of service our customers expect while we work with Blackstone to deploy additional capital and to expand our footprint in the Delaware Basin," said EagleClaw President and CEO Bob Milam.

"Blackstone has a deep understanding of the compelling fundamentals of the upstream and midstream economics in the Permian, an outstanding reputation as an investor in the energy sector and the scale to take EagleClaw to the next level. We are proud to have their support and look forward to a long and successful relationship," Milam added in a statement.

The Permian Basin is seeing a significant increase in activity and investment due to rising oil prices. According to Baker Hughes, the total number of rigs drilling in the Permian rose to 339 last week, which is the most it has been in more than two years.

Source:
Bloomberg
Blackstone Group