Report Volume XXVIII, Number 19 June 1, 2017

May 30, 2017

INDUSTRY NEWS (Irving, TX) – Medallion Pipeline Company, LLC a subsidiary of Medallion Midstream LLC, recently announced a binding open season to solicit long-term firm shipper commitments for a major expansion of its existing crude oil pipeline system in the midland basin (the “expansion”). The expansion will consist of two parts: the Wolfcamp Expansion, which will nearly double the capacity of medallion’s existing Wolfcamp connector mainline; and the Howard expansion, which will increase the capacity of the existing Howard lateral. through these projects medallion will provide much-needed capacity to transport crude oil produced in the midland basin to downstream pipelines and markets. the open season begins on Monday, may 16, 2017 and ends june 9, 2017.

The Wolfcamp Expansion consists of a 16-inch partial loop of the Wolfcamp Connector mainline in Howard, Glasscock, Mitchell and Scurry counties, TX. The Wolfcamp Expansion will commence at the existing Howard-Wolfcamp Interconnect and extend 47 miles to the Colorado City Hub, where Medallion interconnects with several third-party carriers. The Wolfcamp Expansion will increase the existing capacity on the Wolfcamp Connector mainline from 105,000 barrels per day to 200,000 barrels per day and provide firm shippers on the Wolfcamp Connector with multiple options for the receipt and delivery of crude oil.

To further address the needs of producers and marketers in the Midland Basin, Medallion will also expand the capacity of the existing Howard Lateral in Glasscock and Howard counties, Texas. The Howard Expansion will increase the existing 60,000-barrel-per-day capacity of the Howard Lateral, through the addition of pumping horsepower, to 85,000 barrels per day. Due to the bi-directional capabilities of the Howard Lateral, firm shippers on the Howard Expansion will have the flexibility to transport crude oil on several transportation paths.

The open season provides an opportunity for interested shippers to acquire long-term firm capacity, under minimum 10-year term Transportation Services Agreements and other eligibility requirements, as a committed firm shipper on either the Wolfcamp Expansion, the Howard Lateral, or both. The open season will also provide existing firm shippers on the Wolfcamp Connector the option to amend their existing Transportation Services Agreements to obtain the lower Wolfcamp Expansion firm rate in return for an extension of the primary term of the Transportation Services Agreement commensurate with the minimum term required on the Wolfcamp Expansion. The Expansion is expected to commence partial commercial operations in the third quarter of 2017 and full commercial operations in the fourth quarter of 2017.

The open season began on Monday, May 16, 2017 and ends at 5:00 pm CDT Friday, June 9, 2017. All bids must be submitted to Medallion during the open season. Bona fide prospective shippers may obtain copies of the Transportation Services Agreement, as well as the proposed Federal Energy Regulatory Commission and Texas Railroad Commission tariffs by contacting the Medallion representative listed below. Medallion requires a prospective shipper to execute a Confidentiality Agreement prior to delivery of these documents. More information concerning the Expansion and the binding open season is available on the Medallion website www.medallionmidstream.com.

 

 

INDUSTRY NEWS (Houston, TX) – Crestwood Equity Partners LP and First Reserve announced that Crestwood Permian Basin Holdings LLC, a joint venture focused on developing, owning and operating midstream infrastructure in the Delaware Basin, has agreed to acquire Crestwood’s Willow Lake gathering and processing assets located in Eddy County, New Mexico. The companies also announced that the joint venture has approved the construction of a 200 million cubic feet per day cryogenic gas processing plant located near Orla, TX and associated pipeline infrastructure required to connect the Willow Lake system to the plant.

“The announced Orla processing plant and the contribution of Willow Lake to our Permian joint venture with First Reserve is an important step in Crestwood’s strategy of expanding and integrating our Delaware Basin footprint to create a super system that spans over two million acres located in the heart of the most active development counties in the Delaware Basin,” said Robert G. Phillips, Chairman, President and Chief Executive Officer of Crestwood’s general partner. “Dropping the Willow Lake assets into our joint venture is consistent with our strategy of prudently pursuing organic growth opportunities while managing risk and maintaining balance sheet strength. As we continue to build out a large integrated platform in the Delaware Basin, Crestwood and First Reserve are aggressively evaluating new organic expansion opportunities for existing and new customers that will further expand our Permian presence and drive meaningful cash flow growth beginning in 2018.”

The initial project scope will include the Orla Express Pipeline, a 33 mile, 20-inch high pressure line connecting the existing Willow Lake gathering system in Eddy County, NM to the Orla plant. The Orla plant will provide full liquids handling and multiple residue and NGL interconnects. Initial project capital is projected to be approximately $170 million with an in-service date in the second half of 2018.
Upon completion of the project, the joint venture’s integrated gathering and processing footprint will span more than 100 miles and service customers across Eddy and Lea counties, NM and Loving, Ward, Reeves and Culberson counties, TX.
 

INDUSTRY NEWS (Houston, TX) – Targa Resources Corp. announced plans to construct a new common carrier natural gas liquids (“NGL”) pipeline from the Permian Basin. Targa’s NGL pipeline (“Grand Prix”) will transport volumes from the Permian Basin, and also from Targa’s North Texas system, to Targa’s fractionation and storage complex in the NGL market hub at Mont Belvieu, Texas. Grand Prix will be supported by Targa’s volumes and other third party customer commitments, and is expected to be in service in the second quarter of 2019. The capacity of the pipeline from the Permian Basin will be approximately 300 thousand barrels per day, expandable to 550 thousand barrels per day.

Targa is one of the largest gatherers and processors of natural gas in the prolific Permian Basin, with approximately 1.7 Bcf/d of current natural gas processing capacity and approximately 0.7 Bcf/d of processing capacity being added across both the Midland Basin and the Delaware Basin. Targa’s current and future natural gas processing plants and third party connections are expected to generate significant NGL volumes for Grand Prix. Grand Prix is expected to be an attractive and reliable fee-based takeaway solution for NGLs to Mont Belvieu, and will connect to Targa’s fractionation, storage and export assets further downstream.

“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 Joe Bob Perkins, Chief Executive Officer of the Company. “Our ability to offer a highly competitive, fully integrated model, from gathering and processing through transportation and fractionation, to current and future customers should drive continued growth for Targa in both our Gathering and Processing and Downstream segments. One of our key strategic objectives has been to identify attractive opportunities to leverage our growing G&P volumes from one of the best hydrocarbon basins in the world into additional downstream opportunities for Targa and our customers, and Grand Prix is an excellent result of those efforts.”

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