Midstream News
Crosstex offers additional solutions to Utica producers, expands Riverside
Crosstex Energy LP has re-activated its Black Run rail loading terminal and completed the Phase II expansion of its Riverside facility, offering additional midstream solutions to producers.
Located in Frazeysburg, Ohio, on the Ohio Central Railroad (OHCR), the Black Run rail loading terminal allow the export of Utica Shale light oil condensate production. The Black Run facility is a state-of-the-art 20-car rail rack with tracking gangways designed to top load multiple products, including light oil condensate and various grades of crude oil, at a rate of 24,000 barrels per day. The Black Run rail terminal is the first facility to move light oil condensate out of the region to premium-priced refinery and petrochemical markets.
"The re-activation of our Black Run rail facility enables us to offer producer customers in the Utica Shale an immediate midstream solution to export their products to out-of-region markets to maximize value for our customers," said Barry E. Davis, Crosstex president and CEO.
The OHCR is a 70-mile short line freight railroad that interchanges with the Columbus and Ohio River Railroad, CSX Transportation, Norfolk Southern, Ohio Southern Railroad and Wheeling and Lake Erie Railway. The Black Run terminal, adjacent to the partnership's oil gathering pipeline, will leverage the partnership's existing tankage and piping, as well as the capabilities of its truck fleet in the Ohio River Valley.
Additionally, the company has recently increased its Riverside's crude oil transloading capacity with the completion of the southern Louisiana facility's Phase II expansion. The Riverside facility's capacity to transload crude oil from railcars to the partnership's barge facility has increased to approximately 15,000 barrels of crude oil per day.
Phase II additions to the Riverside facility include a 100,000 barrel-per day above-ground crude oil storage tank, a rail spur with a 26-spot crude railcar unloading rack, and a crude offloading facility with pumps and metering as well as a truck unloading bay. As part of the Phase II expansion, Riverside also was modified so that sour crude can be unloaded in addition to sweet crude.
Devon Energy to form midstream MLP
Devon Energy Corp. has approved a plan to form a publicly traded midstream master limited partnership (MLP). The MLP is expected to initially own a minority interest in Devon's US midstream business. This business includes natural gas gathering and processing assets located in Texas, Oklahoma, and Wyoming. Devon expects the MLP to file a registration statement with the Securities and Exchange Commission (SEC) in the third quarter of 2013. Subject to market conditions, an offering of partnership units in the MLP would follow registration with the SEC. Devon will own the general partner of the MLP, all of its incentive distribution rights, and a majority of its common units following completion of the initial public offering. Devon expects to utilize proceeds from the sale of MLP common units to fund its continuing operations.
Enterprise, Western Gas form JV for ownership of NGL fractionation trains
Enterprise Products Partners LP announced June 12 that it has entered into a joint venture (JV) with Western Gas Partners LP, to own natural gas liquid (NGL) fractionation trains 7 and 8, which are currently under construction at Enterprise's complex in Mont Belvieu, Texas. Western Gas has acquired a 25% minority ownership interest in the JV, and Enterprise retains the remaining 75% ownership interest. Trains 7 and 8 have a design capacity to fractionate approximately 170,000 barrels per day (BPD) of NGL, and are expected to begin commercial operations in the fourth quarter of 2013.
Enterprise Products Partners LP is a North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. Western Gas Partners LP, is a Delaware master limited partnership formed by Anadarko Petroleum Corp. to own, operate, acquire and develop midstream energy assets.
Constitution Pipeline seeks FERC approval to construct Marcellus connection
Constitution Pipeline Company LLC, a limited liability company owned by subsidiaries of Williams Partners LP, Cabot Oil & Gas Corp., Piedmont Natural Gas Co. Inc., and WGP Holdings Inc., has filed an application with the Federal Energy Regulatory Commission (FERC) seeking approval to construct a 122-mile pipeline connecting domestic natural gas production in northeastern Pennsylvania with northeastern markets by spring 2015. The Constitution Pipeline has been designed to transport up to 650,000 dekatherms of natural gas per day (enough natural gas to serve approximately 3 million homes) from Williams Partners' gathering system in Susquehanna County, Pa., to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, N.Y. The capital cost of the project is estimated to be $683 million. Since last spring Constitution Pipeline Company has been involved in the FERC pre-filing process, soliciting input from citizens, governmental entities and numerous other interested parties to identify and address issues with the proposed pipeline alignment. The pipeline route filed with the FERC this month reflects changes to more than 50% of the original pipeline alignment – most as a direct result of stakeholder input. The 30-inch underground transmission pipeline would stretch from Susquehanna County, PA, into Broome County, NY, Chenango County, NY, Delaware County, NY, and terminate in Schoharie County, NY. Williams Partners owns a 41% share of Constitution Pipeline and, through its affiliates, will provide construction, operation and maintenance services for the new pipeline. Through their subsidiaries, Cabot owns a 25% share, Piedmont Natural Gas owns a 24% share and WGL owns a 10% share of the company.
First Reserve helps establish Century Midstream with investment up to $500M
Energy private equity firm First Reserve and a veteran management team have formally launched Century Midstream LLC, a new energy company focused on the development, acquisition and expansion of midstream assets across North America, with an emphasis on emerging liquids and liquids-rich shale plays. First Reserve will support Century with up to US$500 million of equity capital to co-found the company. The new Houston, TX-based company will be led by Joseph A. Blount, Jr. as CEO with John Howard serving as president and COO. Blount and Howard are joined by Jim Avioli, Jr. as senior vice president of business development and Brian Raber as senior vice president of engineering. Blount previously served as president and COO of NiSource Midstream & Minerals Group.
Chevron confirms first cargo from Angola LNG
Chevron Corp.'s subsidiary Cabinda Gulf Oil Company Ltd. confirmed that initial production of liquefied natural gas (LNG) has commenced at the Angola LNG project. Angola LNG is one of the largest energy projects on the African continent. The $10 billion project will collect and transport natural gas from offshore Angola to an onshore liquefaction plant on the coast near the Congo River. The project has the capacity to produce 5.2 million metric tons per year of LNG, 63,000 barrels per day of natural gas liquids for export and 125 million cubic feet per day of natural gas for domestic consumption. "The project represents the first LNG project in Angola, and it is expected to contribute to the development of Angola's natural gas industry," said Ali Moshiri, president of Chevron Africa and Latin America Exploration and Production Company. Angola LNG plans to use associated natural gas produced from existing crude oil operations operated by Chevron and other partners as well as new non-associated gas from other offshore fields. The project is expected to reduce natural gas flaring and greenhouse gas emissions from offshore producing areas, and support continued offshore oil field development. Chevron's subsidiary, Cabinda Gulf Oil Co. Ltd., has a 36.4% interest in the joint-venture, along with Sonangol with a 22.8% interest and subsidiaries of Total, BP and ENI, each with a 13.6% interest.
Second phase of Sadara integrated chemicals project financing signed
The second phase of the financing for the construction of Sadara Chemical Company's integrated petrochemicals production complex in Jubail Industrial City II, Saudi Arabia was signed on June 16, raising an aggregate of US$12.5 billion. Sadara is a joint venture between The Dow Chemical Company and Saudi Arabian Oil Company. This financing is the largest ever multi-sourced project financing in the petrochemicals sector and among the largest project financings undertaken in the EMEA region. This integrated hydrocarbon and chlorine-based production complex will include 26 manufacturing units (notably a mixed feed steam cracker and an aromatics plant) as well as three on-site third party process units, and extensive supporting infrastructure. This phase of the financing involved the participation of seven export credit agencies, including COFACE (of France), Euler Hermes (of Germany), FIEM (of Spain), K-Exim and K-sure (both of Korea), UK Export Finance (of the United Kingdom) and US Ex-Im Bank (of the US). The lenders included Saudi Arabia's Public Investment Fund, as well as Saudi and international commercial banks and Islamic institutions participating in Wakala and Procurement facilities. Located in the Eastern Province of Saudi Arabia, the complex is projected to be the world's largest integrated chemical compound ever built in a single phase with a capital cost of around US$19 billion. First production units are expected to come on line in the second half of 2015, with all production units coming on line in 2016. Milbank acted as international counsel to all of the lenders as well as to the joint lead managers of Sadara's earlier US$2 billion Sukuk issuance. Dow Chemical is advised by Shearman & Sterling LLP, and Saudi Aramco by White & Case LLP. The Law Office of Abdulaziz H. Al Fahad are Saudi Arabian counsel to the lenders, and Hatem Abbas Ghazzawi & Co. are Saudi Arabian counsel to Dow Chemical.