Report Volume XXIX, Number 8 December 15, 2017

December 11, 2017

INDUSTRY NEWS (Missouri City, TX) – We are excited about our new service at Pipeline Intelligence Co. It is the Pipeline Intelligence Spreadsheet. The Spreadsheet is updated twice a month (same as the hard copy), and is available for download at pipelineintelligence.com. The added feature costs an additional $195 per year. You must be a subscriber in order to add the Spreadsheet service. Please call us at the office (281) 499-3131 or email us at pipelineintelligence@gmail.com to add this service today.

 

INDUSTRY NEWS (Houston, TX) – Surging Permian Basin production has prompted plans for yet another new pipeline to carry the region’s crude to market.

Magellan Midstream Partners LP has announced plans to develop a new pipeline that would originate from Crane to a location near Three Rivers, transporting various grades of crude and condensate from the Permian and Eagle Ford to the Corpus Christi and Houston markets.

The Tulsa-based company has launched an open season to gauge customer interest in the project; customers can submit binding commitments by 5 p.m. Feb. 1

“We estimate the cost of the project will be in excess of a billion dollars,” Thomas Byers, Magellan’s manager, government and media affairs, said in an email. “However, given the numerous potential variations of this project, we are not providing a total dollar amount at this time.”

He said the proposed pipeline expresses Magellan’s confidence in the longer-term outlook for Permian Basin production and export markets.

The proposed project would include construction of an approximately 375-mile, 24-inch-diameter pipeline from Crane to Three Rivers, where shippers could opt to deliver crude and condensate to the Houston area via a new 200-mile pipeline, or to the Corpus Christi area via a new 70-mile pipeline. The pipeline system is expected to have an initial capacity of at least 350,000 barrels per day with the ability to expand up to 600,000 barrels per day for each destination, depending on demand.

Magellan is considering additional extensions for Midland and Orla, which would tie into the company’s 60-mile, 24-inch Delaware Basin pipeline that is being built to carry Delaware Basin crude and condensate from Wink to Crane.

The new pipeline system would offer Permian Basin and Eagle Ford shippers access to multiple destinations in the Houston and Corpus Christi areas, including refiners and fractionators and access to deep water export docks.

Subject to all permits and approvals, this new pipeline could be operational by the end of 2019.
Magellan’s announcement comes a day after the company and its joint venture partner in the BridgeTex pipeline, Plains All American Pipeline, launched a supplemental open season to gauge customer interest in expanded capacity for the BridgeTex pipeline.

BridgeTex, which was just expanded from 300,000 barrels per day to 400,000 barrels per day, is being expanded again to 440,000 barrels per day. Byers said the pipeline will be able to accommodate additional commitments of up to 40,000 barrels by 2018. He said mechanical upgrades to the pipeline will be complete in early 2019.

Potential customers of this proposed additional expansion should submit binding commitments by 5 p.m. Dec. 30.

 

 

INDUSTRY NEWS (Oakville, ON) – Liberty Utilities wants to build a new natural gas pipeline between the Seacoast and Manchester, in an effort to expand the state’s strained capacity for the fuel at the lowest cost to ratepayers.

The 16-inch-wide pipeline, which Liberty is calling Granite Bridge, would run underground for 27 miles along Route 101. It would be completely buried in a state right-of-way.

“So, there’ll be very little impact to private property,” said Liberty spokesman John Shore. “There won’t be anything like eminent domain or anything like that.”

The $340-million proposal also includes a gas storage center in Epping, which Shore said would be significantly larger than Liberty’s existing storage facilities.

Granite Bridge would be the first pipeline the company builds, owns and operates itself. It would connect two other pipelines that run roughly north through Manchester and Exeter. Those are owned by out-of-state companies.

Liberty had also hoped to get natural gas from a pipeline Texas-based Kinder Morgan first proposed building in New Hampshire in 2014. The company withdrew its controversial application in 2016, citing a lack of prospective business.

Shore said Liberty needs more gas capacity, no matter where it comes from.

“The [Kinder Morgan] project was a way to get it here, so that didn’t materialize,” he said. “So [Granite Bridge] is another option that we think is a very good option for customers in New Hampshire.”

The company will face a lengthy state approval process before it can break ground.

 

 

INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners L.P. announced plans to convert one of its natural gas liquids pipelines that transports NGLs from the Permian Basin to the Texas Gulf Coast to crude oil service. The conversion is expected to be completed in the first half of 2020. This pipeline conversion would provide the partnership with total crude oil pipeline capacity of over 650,000 barrels per day (“BPD”) from the Permian Basin to Enterprise’s crude oil hub in the Houston area.

Enterprise has three existing NGL pipelines that stretch from the Permian Basin to the Texas Gulf Coast: the Seminole Blue, Seminole Red and Chaparral. The Shin Oak NGL pipeline, which is currently under construction, will be the partnership’s fourth NGL pipeline from the Permian Basin to the Texas Gulf Coast. The Shin Oak pipeline is expected to be in service in the second quarter of 2019. The completion of the Shin Oak pipeline provides Enterprise the flexibility to divert NGL volumes from at least one of its existing NGL pipelines onto Shin Oak and repurpose the vacated NGL pipeline to crude oil service. Enterprise is currently evaluating which NGL pipeline(s) to repurpose.

“We have had strong demand for crude oil transportation, storage and marine terminal services for crude oil production from the Permian Basin,” said A.J. “Jim” Teague, chief executive officer of the general partner of Enterprise. “This repurposing of an NGL pipeline to crude oil service is another example of our system flexibility and the innovation of our employees to respond to customer needs while increasing the distributable cash flow and value of our partnership.”

 

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