PRISM TO CONSTRUCT PERMIAN LIQUIDS HANDLING FACILITY
Prism Midstream LLC will begin construction in June of the Bedrock Liquids Handling Facility in Crockett County, Texas. The facility will handle both on-spec and off-spec natural gas liquids (NGLs) and off-spec condensate and is scheduled to be in operation by the end of the first quarter of 2016.
The Bedrock facility will have an initial capacity of 5,500 b/d and be expandable to 11,000 b/d of off-spec product. The facility will provide a reliable outlet for both on and off-spec NGLs and for off-spec condensate. The Bedrock Liquids Handling Facility will be equipped with five truck racks, expandable to 12. Prism has executed definitive agreements with Enbridge Liquids Transportation & Marketing LP for firm capacity at the Bedrock facility and is negotiating additional commitments.
ENTERPRISE ACQUIRES EAGLE FORD MIDSTREAM ASSETS
Enterprise Products Partners LP has executed definitive agreements to purchase all of the member interests in EFS Midstream LLC from affiliates of Pioneer Natural Resources Co. and Reliance Industries Ltd. for $2.15 billion. The purchase price will be paid in two installments with the first installment of $1.15 billion paid at closing and the final installment of $1.0 billion paid no later than the first anniversary of the closing date.
EFS Midstream provides gas gathering, treating, compression and condensate processing services in the Eagle Ford Shale. The EFS Midstream system includes approximately 460 miles of natural gas gathering pipelines, 10 central gathering plants, 780 million cubic feet per day of natural gas treating capacity and 119 thousand barrels per day of condensate stabilization capacity. Under the terms of the agreements, the Pioneer and Reliance joint development will dedicate its Eagle Ford Shale acreage to Enterprise under a 20-year, fixed-fee gathering agreement that includes a minimum volume requirement for the first seven years. Pioneer and Reliance will also dedicate their Eagle Ford Shale acreage under related 20-year fee-based agreements with Enterprise for natural gas processing, natural gas liquids transportation and fractionation, and for natural gas, processed condensate and crude oil transportation services.
Completion of this transaction is subject to customary regulatory approvals and closing conditions. The transaction is expected to close in the third quarter of 2015.
UNIMIN BEGINS UNIT TRAIN SERVICE TO MARCELLUS REGION
Unimin Energy Solutions has made the first delivery of frac sands by unit train to its Jerry Run, West Virginia, terminal. Unimin, with partners CSX Railroad and Process Transload, operate a transload and storage facility in the southern Marcellus region in West Virgina and southwestern Pennsylvania.
The Jerry Run terminal has a 20,000-ton storage capacity and 25 trucks per hour loading rate to facilitate rapid response and improved logistics. The CSX Railroad will shuttle unit trains to continuously replenish frac sand inventory.
The Jerry Run terminal is the most recent addition to Unimin's 10-terminal network operating in the Marcellus and Utica plays.
Unimin Energy Solutions produces Northern White sand proppants under the UNIFRAC trade name and a vertically integrated producer of resin-coated proppants, ground and micronized cementing additives, and drilling fluid agents.
GIP II, HESS FORM BAKKEN JV
Global Infrastructure Partners (GIP) says that its second fund, Global Infrastructure Partners II, and affiliated funds, have agreed to enter into a strategic joint venture with Hess Corp. through the acquisition of a 50% interest in Hess Infrastructure Partners, the owner of Hess's midstream crude oil and natural gas infrastructure assets located primarily in the Bakken shale play. The purchase price for the transaction is $2.675 billion, and it is expected to be financed with a combination of equity and debt. Following the transaction, Hess will retain a 50% interest in Hess Infrastructure and will continue to act as the operator of the assets. The midstream assets are located primarily in Williams, Mountrail, and McKenzie counties, North Dakota, and comprise crude oil and natural gas gathering systems, a natural gas processing and fractionation facility, crude oil export logistics assets, and an underground propane storage facility, all of which provide services to Hess and its affiliates. The transaction is expected to close in the third quarter of 2015.
APA COMPLETES $4.6B ACQUISITION OF QCLNG PIPELINE FROM BG
APA Group has completed the acquisition from BG Group of the Queensland Curtis LNG Pipeline. The final acquisition price is $4.6 billion, and the first full year EBITDA contribution is expected to be around $355 million. The transaction was announced Dec. 10, 2014. As part of the completion process, APA has renamed the pipeline to the Wallumbilla Gladstone Pipeline. The acquisition extends the footprint of APA's east coast gas grid to over 4,660 miles across eastern Australia and represents APA's largest-ever pipeline acquisition. APA also gained two global customers in BG Group and China National Offshore Oil Corp. (CNOOC) as part of the transaction.
ETP PURCHASES PIPELINE SYSTEM FROM EDGEMARC ENERGY
Energy Transfer Partners LP has provided further details on its previously announced Revolution Project that will increase its operations in the growing Marcellus and Upper Devonian production areas of Western Pennsylvania. ETP has entered into long-term gas gathering, processing, and fractionation agreements with EdgeMarc Energy.
To facilitate these agreements, ETP has purchased approximately 20 miles of high-pressure pipeline from EdgeMarc and will build a new cryogenic gas processing plant, a new fractionator and additional gas gathering pipelines.
ETP plans to construct 100 miles of high pressure 24- and 30-inch rich-gas pipeline providing a total gathering system capacity in excess of 440 million cubic feet per day. The Revolution Pipeline originates in Butler County, Pennsylvania, and will extend to ETP's Revolution Plant, a new cryogenic gas processing plant to be constructed in Western Pennsylvania. The Revolution Plant is expected to be in-service by the second quarter of 2017 and will allow for future processing growth for additional third-party gas.
The residue gas from the plant will be delivered into ETP's Rover interstate pipeline for deliveries to downstream markets. The natural gas liquids (NGLs) will be delivered to Sunoco Logistics' (SXL's) Mariner East pipeline system for delivery to domestic and export markets.
The project also includes a fractionation facility that will be constructed at SXL's Marcus Hook Industrial Complex in Marcus Hook, Pennsylvania. The fractionation facility is expected to be in service by the second quarter of 2017.
The overall expected capital cost for the pipeline system and the associated facilities, which will be supported by long-term fee-based agreements, is approximately $1.5 billion.
ALASKA LNG GAINS CONDITIONAL AUTHORIZATION TO EXPORT LNG
The US Department of Energy has conditionally authorized ALaska LNG Project LLC to export liquefied natural gas (LNG) to non-Free Trade Agreement (non-FTA) countries.
The application to export up to 20 million metric tons per year of LNG from Alaska for a 30-year period was submitted to the DOE last July. Authorization to export to nations with existing FTAs with the US was previously received in November 2014. The June 1 announcement conditionally further expands the authorization to include non-FTA countries as well.
The proposed project facilities include a liquefaction facility in the Nikiski area on the Kenai Peninsula, an 800-mile large-diameter pipeline, up to eight compression stations, at least five take-off points for in-state gas delivery, a gas treatment plant located on the North Slope, and transmission lines to transport gas from Prudhoe Bay and Point Thomson to the gas treatment plant.
Alaska LNG project participants are Alaska Gasline Development Corp. and affiliates of ExxonMobil, TransCanada, BP, and ConocoPhillips.
GRAVITY ACQUIRES CRUDE OIL TERMINAL ON CORPUS CHRISTI SHIP CHANNEL
Gravity Midstream LLC 's wholly owned subsidiary, Gravity Midstream Corpus Christi LLC, has closed on the acquisition of a 44-acre crude oil logistics terminal located on the Corpus Christi Ship Channel. The facility will serve traders, producers, and refiners of crude oil and condensate produced in the Eagle Ford shale play and the Permian Basin. Gravity expects to bring the terminal into service in September under the name Gravity Oil Terminal at Corpus Christi (GOTAC Terminal).
Existing infrastructure at GOTAC includes 800,000 barrels of tankage with access to an additional planned 2 million barrels of storage capacity, deepwater dock access, a crude processing unit (CPU) with current capacity to process up to 25,000 barrels per day (b/d) of heavy crude, and rail and truck loading and unloading facilities. Gravity expects to convert the CPU into a 35,000-bpd condensate stabilizer or condensate splitter. If customer demand is sufficient, Gravity will build a second stabilizer or splitter, enabling the company to process up to 100,000 b/d at the GOTAC Terminal.
Gravity Midstream Corpus Christi LLC acquired the facility from Trigeant Ltd. for $100 million. The transaction was part of a Chapter 11 plan approved by a Florida bankruptcy court in May. Kaye Scholer LLP served as lead legal counsel to Gravity.
NEXTDECADE RAISES ADDITIONAL FUNDING FOR RIO GRANDE LNG PROJECT
Valinor Management LP and Halcyon Energy Investors LP have joined certain funds managed by York Capital Management Global Advisors LLC and its affiliates in providing NextDecade LLC with an additional $85 million in order to take the Rio Grande LNG (RGLNG) and Rio Bravo Pipeline project to final investment decision and to fund the continued development of Pelican Island LNG (PILNG) in Galveston, Texas. The terms of the transaction include options for NextDecade's three strategic investors to invest the requisite FID equity sufficient to begin construction of the RGLNG project.
NextDecade has executed a front-end engineering and design agreement with Chicago Bridge & Iron Co. (CB&I), as well as the terms under which CB&I could assume the role as the EPC contractor on the RGLNG project. NextDecade plans to complete FEED by the end of the year, and expects RGLNG to achieve first LNG by the third quarter of 2020.
TALL OAK CLOSES TWO CREDIT FACILITIES
Tall Oak Midstream LLC's subsidiaries, TOMPC LLC and TOM-STACK LLC, have each closed a $75 million credit facility with accordion features that allow for expansions to $100 million. The two credit facilities closed on June 23. The senior secured facilities bring Tall Oak's total debt capacity to $200 million. Together with $700 million in prior private equity commitments from EnCap Flatrock Midstream and Tall Oak's founders, total financing capacity for Tall Oak I and Tall Oak II now stands at $900 million.
The new TOMPC credit facility replaces the prior TOMPC facility, which was set to mature on Oct. 14. It will support planned expansions to Tall Oak's natural gas gathering and processing system in the Central Northern Oklahoma Woodford play.
Six banks participated in each of the credit facilities, with Capital One NA acting as administrative agent and Capital One Securities serving as one of three joint lead arrangers alongside BBVA Compass and BancFirst. Amegy Bank National Association served as documentation agent. Additional participants are Bank of Oklahoma and KeyBank. Paul Hastings LLP provided legal counsel to Tall Oak, and Sidley Austin LLP advised the underwriters.
