Midstream News
ONEOK Partners to invest in Williston Basin projects
ONEOK Partners LP plans to invest $650 million to $780 million in Williston Basin growth projects between now and the second quarter of 2016.
These projects include building a new natural gas processing facility (the Lonesome Creek plant) with a capacity of 200 million cubic feet per day (MMcf/d), along with related infrastructure in McKenzie County, North Dakota, in the Bakken shale play in the Williston Basin. ONEOK Partners will also complete a second expansion of the Bakken NGL Pipeline, which will increase the pipeline's capacity to 160,000 barrels per day (bpd) from 135,000 bpd.
The Lonesome Creek plant is expected to cost $320 million to $390 million. It will be the partnership's largest natural gas processing plant in North Dakota and will increase the partnership's total natural gas processing capacity in the state to 800 MMcf/d.
In addition to the Lonesome Creek plant, ONEOK Partners plans to invest $230 million to $290 million for related expansions and upgrades to its existing natural gas gathering and compression infrastructure. The Lonesome Creek plant and related infrastructure should be completed by the end of 2015 and will be supported by acreage dedications from producers.
ONEOK Partners expects to invest an additional $100 million to increase capacity on its Bakken NGL Pipeline, which is currently being expanded to 135,000 bpd from an original capacity of 60,000 bpd. This previously announced initial expansion is expected to be completed in the third quarter of 2014. The second expansion of the Bakken NGL Pipeline, which is expected to be completed during the first half of 2016, will increase its capacity to 160,000 bpd to accommodate NGL volumes from the new Lonesome Creek plant.
Magellan closes Pipeline acquisition, names future CFO
Magellan Midstream Partners LP has closed on its previously-announced acquisition of Rocky Mountain pipeline assets from Plains All American Pipeline LP and appointed its future CFO.
The acquired pipeline system includes approximately 550 miles of common carrier pipeline that distributes refined petroleum products in Colorado, South Dakota and Wyoming. The system includes 4 terminals with nearly 1.7 million barrels of storage.
Magellan funded the $135 million purchase price primarily with proceeds from the partnership's recent debt offering.
Additionally, Michael Osborne will join Magellan Midstream Partners LP to replace John Chandler, current CFO, upon Chandler's previously-announced departure from the company on March 31, 2014. Osborne has more than 23 years' experience in the energy industry with extensive experience in SEC reporting, debt and equity offerings, mergers and acquisitions and technical accounting and financial matters. He has spent his entire career with Ernst & Young LLP, serving as an audit partner for the past 11 years. Osborne holds a bachelor's degree in accounting from the University of Oklahoma and is a certified public accountant.
Osborne joined the partnership on Nov. 18.
Willbros group enters gas processing plant market
Energy infrastructure contractor Willbros Group Inc. has entered the gas processing plant market with the hiring of Dan Hubbard as vice president Tulsa Operations, Gas Processing.
Hubbard has 22 years of experience designing modular cryogenic gas processing plants. He joins Willbros from Hydrocarbon Processing Technology LLC, a company he founded in 1992. While with Hydrocarbon Processing Technology, Hubbard was responsible for overseeing the design, fabrication and installation of gas processing, gas treating and nitrogen rejection plants. Additionally, he provided engineering consultation and design services for gas processing clients.
Based in Tulsa, Okla., Hubbard will be responsible for leading the technical development of the company's gas processing plant offerings. Notably, as part of Willbros' new service offerings, he has designed a standardized, modular, cryogenic plant that is designed for the hydrocarbon mix and infrastructure availability found in the Marcellus and Utica shale plays.
Hubbard earned a Bachelor of Science in Chemical Engineering with a minor in Petroleum Engineering from the University of Tulsa.
Spectra Energy secures contracts for US Gulf expansion project
Spectra Energy Corp. and Spectra Energy Partners have executed new long-term contracts for 650,000 dekatherms per day (Dth/d) of natural gas shipments on the Texas Eastern pipeline system to support the growing manufacturing sector and liquefied natural gas (LNG) export industry along the Texas and Louisiana coast.
Spectra Energy's Texas Eastern system provides natural gas from the burgeoning Marcellus, Utica and Eagle Ford production areas to meet demand growth in the industrial and LNG export sectors.
Phase one of the project will transport 250,000 Dth/d as early as November 2016. Phase two will bring an additional 400,000 Dth/d to these markets beginning in September 2017 and ramping up through December 2018. The Gulf Markets Expansion Project is a continuation of Spectra Energy's development efforts, including the Team 2014 and OPEN projects, to transform its Texas Eastern Transmission mainline into a bi-directional system providing diverse supply access to Northeast, Southeast and Gulf Coast markets.
Azure completes purchase of TGGT Midstream
Azure Midstream Holdings LLC completed its acquisition from EXCO Resources Inc. and BG Group plc of 100% of the equity interest in TGGT Holdings LLC for an aggregate sale price of $910 million, plus customary working capital adjustments.
As part of the transaction, Energy Spectrum Partners VI LP, a group of co-investors affiliated with Energy Spectrum and an affiliate of Tenaska Capital Management LLC contributed cash for an ownership stake in Azure. In a related transaction, the East Texas Gathering System, an asset managed by Tenaska Capital, is being contributed for an additional ownership interest. As partial consideration to the transaction, EXCO and BG will collectively own approximately 7% of Azure.
With the combination of TGGT and ETG, Azure will operate more than 1,300 miles of gathering pipelines that move natural gas from North Louisiana and East Texas supply basins to 20+ existing major intrastate and interstate pipelines in the region. The pipelines have a combined delivery capacity of approximately 4 billion cubic feet per day (bcfd) including 2.7 bcfd of treating capacity. The systems are currently gathering and delivering approximately 1.3 bcfd. JP Morgan served as the debt arranger for the transaction.
Enbridge advances Bakken project
Enbridge Energy Partners and Enbridge Inc. say that Marathon Petroleum Corp. has been secured as an anchor shipper for the $2.6 billion Sandpiper Pipeline Project component of Enbridge's overall $6.2 billion Light Oil Market Access Program, which was announced on Dec. 6, 2012. The Sandpiper Pipeline Project will be integrated with the partnership's North Dakota (ND) System. Marathon will fund 37.5% of the project in exchange for a 27% equity interest in the ND System.
The LOMA Program consists of several projects which will collectively allow an additional 400,000 barrels per day (bpd) of light crude oil from Western Canada, and from the Bakken formation in ND, to access markets in Eastern Canada and the US Midwest. The program includes the 300,000-bpd Southern Access Extension Pipeline from Flanagan to the Patoka, Illinois, hub; an 80,000-bpd upsize of the Line 9 reversal project to move crude oil from Sarnia, Ontario, to refineries in Ontario and Quebec; and enhancements to the flexibility of Enbridge's mainline in Western Canada. These projects are all funded by Enbridge Inc.
The program also includes an upsize of the Eastern Access Program US mainline expansion project between Griffith, Indiana, and Sarnia, which is being jointly funded by the partnership and Enbridge. The Bakken takeaway capacity of the ND System will be expanded to a total of 580,000 bpd with a target in-service date of early 2016. The expansion will involve construction of a 24-inch-diameter line from Beaver Lodge, ND, to Clearbrook, Minn., and a 30-inch-diameter line from Clearbrook to the Superior, Wis. mainline system terminal. The new line will serve as a twin to the existing 210,000-bpd ND System mainline, which now terminates at the Clearbrook Terminal, adding 225,000 bpd of capacity on the twin line between Beaver Lodge and Clearbrook and 375,000 bpd between Clearbrook and Superior.
Briefs
US DOE authorizes additional LNG facility volume
The US Department of Energy (DOE) has authorized Freeport LNG Expansion LP and FLNG Liquefaction LLC (Freeport) to export additional volumes of domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the US from the Freeport LNG Terminal in Quintana Island, Texas.
Freeport previously received approval to export 1.4 billion cubic feet of natural gas a day (Bcf/d) of LNG from this facility to non-FTA countries on May 17. The Freeport Expansion application was next in the order of precedence after the Energy Department authorized Dominion's proposed Cove Point facility in September. Subject to environmental review and final regulatory approval, the facility is authorized to export an additional 0.4 bcf/d, for a total rate of up to 1.8 bcf/d, for a period of 20 years.