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TRANSPORTATION — Quick Takes
EPP to build ATEX Express NGL pipeline
Enterprise Products Partners LP (EPP) received sufficient transportation commitments to support development of its 1,230-mile Appalachia-to-Texas pipeline (ATEX Express), delivering ethane production from the Marcellus-Utica shale areas of Pennsylvania, West Virginia, and Ohio to the US Gulf Coast. ATEX Express will transport as much as 190,000 b/d from Appalachian production areas to EPP's storage and distribution assets in Texas.
Originating in Washington County, Pa., the system's first leg would involve construction of about 595 miles of new pipeline extending to Cape Girardeau, Mo., closely paralleling an existing Enterprise pipeline. At Cape Girardeau, EPP will reverse a 16-in. OD pipeline and place it into ethane service.
At the southern terminus of the ATEX Express pipeline, EPP will build a 55-mile, 16-in. OD pipeline providing access to its NGL storage complex at Mont Belvieu, Tex.
EPP is conducting surveys and negotiating right-of-way agreements, and expects. ATEX Express to begin commercial operations first-quarter 2014.
US Gulf Coast petrochemical demand for price-advantaged ethane feedstock over crude oil-based derivatives is about 955,000 b/d and continues to increase, EPP said.
Nebraska DEQ relays Sandhills data to TransCanada
Nebraska's Department of Environmental Quality said on Dec. 29 that it has identified areas it considers part of the Sandhills region, and has forwarded the information to TransCanada Corp. as the company selects a new route for its proposed Keystone XL crude oil pipeline across the state.
"Obviously, the applicant cannot propose the route without knowing the area to be avoided," NDEQ Director Mike Linder said. "NDEQ has been reviewing available information and has selected a map of eco-regions which was finalized in 2001 as best depicting the Sandhills region."
TransCanada considers the information a very positive step, a spokesman told OGJ on Dec. 30. "Now that Nebraskans have defined where the Sandhills are, we'll know sensitive areas to avoid and routes to suggest that will have the least impact on landowners," he said.
Gov. Dave Heineman called the state's legislature back into special session in early November after several officials, residents, and groups expressed concern about the pipeline's original route, which would have crossed the Sandhills lying atop the Ogallala aquifer, Nebraska's primary drinking water source.
The lawmakers quickly passed a bill recommending that an alternative route be developed. US President Barack Obama also announced on Nov. 11 that he would delay deciding on TransCanada's application for the project's cross-border permit until after the 2012 election to allow time to resolve the matter and other environmental questions. Congress included a provision requiring him to issue a decision much sooner in payroll tax cut extension legislation passed in mid-December.
The Nebraska legislature's bill also gave NDEQ new responsibilities relating to supplemental environmental impact statements relating to oil pipelines. The provision's first application will be for the Keystone XL project as the agency works with the US Department of State on its review of TransCanada's cross-border permit application, NDEQ said.
Thomas Pyle, president of the Institute for Energy Research in Washington, said that NDEQ's action underscores the need for the Obama administration to act immediately and approve the project so construction can commence.
Chesapeake Midstream Partners to buy gathering lines
Chesapeake Midstream Partners LP (CMP) agreed to acquire Appalachia Midstream Services LLC (AMS), a Chesapeake Energy Corp. subsidiary, for $865 million. The transaction provides CMP with a 47% stake in 200 miles of gathering pipelines in the Marcellus shale in Pennsylvania.
Closing was expected on Dec. 30. CMP is a gathering and processing master limited partnership. Throughput for the AMS assets as of Dec. 15 was just over 1 bcfd. AMS operates the assets under 15-year fixed fee gathering agreements with Marcellus natural gas and liquids producers.
CMP Chief Executive Officer J. Mike Stice said, "We are excited to expand our footprint into the Marcellus shale, further increasing our basin diversification and, more importantly, exposing us to the increased drilling activity in the liquid-rich regions in the Marcellus South."
CMP is a spun-off subsidiary of Chesapeake, which is selling assets to trim long-term debt. Chesapeake of Oklahoma City formed CMP with Global Infrastructure Partners, a private investment firm. Chesapeake now owns a 35% stake in CMP.
Aubrey K. McClendon, Chesapeake's chief executive officer, said this was the independent's second sale of gathering assets to CMP."Combined with our Springridge Haynesville asset sale of $500 million in December 2010, we have now dropped down gathering assets of approximately $1.4 billion into [CMP]," McClendon said of Louisiana pipelines.
CMP was established under a different name with some Chesapeake gathering pipelines.
"Combined with the $1.2 billion Barnett, Permian, and Midcontinent gathering assets contributed to the formation of [CMP]'s predecessor in September 2009," McClendon said. Chesapeake has monetized $2.6 billion of its midstream asset portfolio at a more attractive valuation than if these assets had stayed on Chesapeake's balance sheet, he added.
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