Woodside cleared to acquire Apache's stakes in LNG projects
The Australian Competition and Consumer Commission (ACCC) said March 5 that it will not oppose Woodside's proposed acquisition of Apache Corp.'s interests in the Wheatstone, Balnaves, and Kitimat projects. The Wheatstone and Balnaves projects are located in the Northern Carnarvon Basin, offshore Western Australia, while the Kitimat project is located in British Columbia, Canada. Woodside and Apache overlap in the wholesale supply of natural gas to the domestic market in Western Australia. While the ACCC determined that the proposed acquisition would be unlikely to raise significant competition concerns, it acknowledged concerns expressed by the market about the effects of any further industry consolidation.
Texas LNG files with FERC to commence prefiling process for Brownsville LNG project
On March 9, Texas LNG Brownsville LLC initiated the US Federal Energy Regulatory Commission pre-filing process, starting the regulatory review for the proposed liquefied natural gas (LNG) export facility in Brownsville. Texas LNG plans to build the Brownsville project in two phases, each with LNG production of 2 million tonnes per year (MTA). Pending FERC's final approval to construct the project, Phase 1 is expected to commence production in 2020.
Texas LNG has executed an amendment to its Option to Lease Agreement with the Brownsville Navigation District in Cameron County to upgrade to a 625 acre site with deepwater frontage to the Port of Brownsville shipping channel. The new site is located approximately five miles from the mouth of the Gulf of Mexico on the north side of the channel.
Texas LNG's equity and engineering partner, Samsung Engineering Co. Ltd. has assigned a team of engineers and project staff at its Global Engineering Center in Seoul, Korea to lead the engineering phase of the project with support from its Houston-based North American headquarters. As of the end of February 2015, Samsung Engineering has completed four months out of the 12 month Front End Engineering and Design study and over 50,000 cumulative man-hours of engineering. Texas LNG is being supported by its owner's engineer, Braemar Engineering, and environmental consultant, Natural Resource Group (NRG).
EnCap Flatrock invests up to $750M in Moda Midstream
Moda Midstream LLC, a liquids terminaling and logistics provider, has secured an initial equity commitment of $750 million from EnCap Flatrock Midstream and the Moda management team. Moda was formed earlier this year to provide independent terminaling, storage and distribution solutions to refiners, petrochemical manufacturers, marketers and producers of crude oil, condensate, NGLs, refined products and other bulk liquids. Moda's expertise includes deepwater vessel loading and unloading, storage, blending, processing and pipeline operations.
Moda Midstream is led by its four founding partners, president and CEO Ken Owen; senior vice president of commercial and business development Bo McCall; senior vice president and CFO Jon Ackerman; and senior vice president and COO Javier del Olmo. Moda's founding partners worked together as members of the executive team at Oiltanking North America LLC and its publicly traded affiliate, Oiltanking Partners LP.
Moda Midstream was advised by Vinson & Elkins and Crain, Caton & James. EnCap Flatrock was advised by Thompson & Knight.
Anadarko Joins Magellan, Plains All American to Build Saddlehorn Pipeline
A wholly-owned subsidiary of Anadarko Petroleum Corp. has exercised its option to purchase a 20% equity interest in Saddlehorn Pipeline Co. As a result, the equity ownership in Saddlehorn will be 40% Magellan Midstream Partners, 40% Plains All American Pipeline LP, and 20% Anadarko.
Saddlehorn is a limited liability company that will construct, own and operate the Saddlehorn pipeline, an approximately 550-mile pipeline that will transport various grades of crude oil from the DJ Basin, and potentially the broader Rocky Mountain area resource plays, to storage facilities in Cushing, OK owned by Magellan and Plains. The 20-inch pipeline will have an ultimate capacity to transport up to 400,000 barrels per day (bpd), but the initial capacity of the Saddlehorn pipeline is expected to be closer to 200,000 bpd.
An extension to Carr, CO is also under consideration for connection to existing crude oil assets owned by Plains in that region.
The project is currently estimated to cost between $800 million and $850 million. Magellan will serve as construction manager and pipeline operator of the Saddlehorn system. Subject to necessary permits and regulatory approvals, the Saddlehorn pipeline is expected to be operational during mid-2016.
EQT to sell West Virginia gathering system for $1B
EQT Midstream Partners LP has agreed to acquire the Northern West Virginia Marcellus Gathering System from EQT Corp., along with a preferred interest in an EQT subsidiary, for $1.05 billion. EQT will receive $997.5 million in cash and $52.5 million in common and general partner units. In addition, the partnership will fund $370 million of system expansion projects over the next several years.
The gathering system was designed and constructed to gather natural gas production in the wet gas and dry gas regions of the Marcellus; specifically in the Saturn, Mercury, Pandora, and Pluto development areas. The system includes 70 miles of natural gas gathering pipeline and nine compressor units with 25,000 horsepower of compression. In addition, the system includes a 30-mile, high-pressure wet gas header pipeline that moves wet gas from the development areas to the MarkWest Mobley processing facility. EQT contracted for 10 years of firm capacity on the system.
EQT Midstream Partners LP expects to install 100 miles of gathering pipeline and five compressor units with 23,700 horsepower of compression over the next several years. Ongoing maintenance capital expenditures related to the system are forecast to be less than $5 million per year.
EQT currently holds 76,000 net acres in northern West Virginia that surround the acquired gathering system, including 59,000 net undeveloped acres. As of Dec. 31, 2014, there were 199 Marcellus wells and 20 Upper Devonian wells being serviced by the gathering system, with an average daily gathered volume of approximately 410 MMcf per day.
The terms of the acquisition were approved by the Conflicts Committee of the board of directors of EQT Midstream Services LLC, the general partner of the Partnership (General Partner), which is composed entirely of independent directors. The committee was advised by Evercore Group LLC regarding financial matters; and Richards, Layton & Finger PA regarding legal matters. The General Partner and its affiliates were advised by Baker Botts LLP.
Bear Head LNG receives Permit to Construct
The Nova Scotia Utility and Review Board (UARB) has issued Bear Head LNG Corp. an updated and amended Permit to Construct, making the project the first in Eastern Canada to be granted such authorization. The approval followed a recommendation from Lloyd's Register, the UARB's certifying authority. Bear Head LNG has now obtained nine of the 10 initial Canadian federal, provincial, and local regulatory approvals needed to construct a liquefied natural gas export facility on the Strait of Canso in Nova Scotia.
The UARB first permitted Bear Head LNG as an LNG import facility in 2005. Facilities were partially constructed and have been kept in "hot‐idle" status since 2008. The UARB previously granted extensions of the Permit to Construct in 2009 and 2013. On February 9, 2015, the Canadian Environmental Assessment Agency (CEAA) issued a letter concluding that the Bear Head LNG project is substantially the same as the project previously approved by CEAA. As a result, no further agency review is required.
The last of the 10 initial Canadian environmental and engineering approvals required is an updated and amended registration document which will soon be filed with Nova Scotia Environment (NSE), the provincial government department with a broad mandate to protect the environment
Bear Head LNG has submitted project description information to the department and anticipates NSE approval of this permit amendment in the second quarter of this year. Once constructed, the Bear Head LNG project will have an initial production capacity of 8 million tons per annum (mtpa) of export LNG.
Project timing depends on regulatory approval, as well as contracts with gas suppliers and LNG buyers. Without major delays in the regulatory process, the facility would be in operation by 2019.
The Bear Head LNG site is located on the Strait of Canso in Point Tupper, Richmond County, Nova Scotia, which is about half the shipping distance to major European markets compared to US Gulf Coast ports, and is closer than its North American competitors, including those in British Columbia, to other burgeoning natural gas markets such as India.
HEP expands into Marcellus
Howard Midstream Energy Partners LLC has executed a definitive purchase and sale agreement with Southwestern Energy Co. to purchase the company's northeast Pennsylvania natural gas gathering assets in Bradford and Lycoming counties for $500 million. The systems, serving the Marcellus region, include 100 miles of natural gas gathering pipeline, with nearly 600 MMcf/d of capacity. In addition to the existing systems, HEP plans to design, construct, and operate a new natural gas gathering system for Southwestern Energy in Tioga County. Once fully operational, the new system is expected to add up to 380 MMcf/d of capacity in the area. The transaction is expected to close 2Q15. HEP, which is based in San Antonio, Texas, plans to open an office in Pennsylvania upon the transaction's closing.
EnLink completes Coronado acquisition
The EnLink Midstream companies, EnLink Midstream Partners LP and EnLink Midstream LLC, have completed the acquisition of Coronado Midstream Holdings LLC, which owns natural gas gathering and processing facilities in the Permian Basin, for approximately $600 million.
Williams seeks FERC approval for pipeline expansion
Williams said March 19 that Transco has filed an application with the US Federal Energy Regulatory Commission (FERC) for its Dalton Expansion Project, which would support providing Marcellus shale gas to the Southeast for electricity generation and local natural gas distribution.
Construction is planned to begin in the third quarter of 2016, with completion targeted for 2017, subject to all necessary or required approvals by FERC and all other regulatory bodies.
