INFRASTRUCTURE & CONSTRUCTION
Midstream Opportunities Outside The Permian East Daley Capital, a Colorado-based energy asset research group, has quantified where and why midstream entities will succeed this year. The biggest reason midstream firms will thrive this year is not related to new technology, unique infrastructure designs or complex contracts. The main reason for optimism amongst midstream services is due to increased oil and gas production across the U.S. The Bakken will benefit from increased production, rising rig counts and the presence of more frack crews this year as opposed to last. Midstream entities will have ample opportunity for increasing services and man-hours. Companies like ONEOK, Kinder Morgan, Targa, Enbridge and Tallgrass will all see a better year this year due to an increase in production. Firms linked to shale gas—especially those in the Marcellus and Utica regions—will also benefit because of higher production volumes, according to East Daley. “The Marcellus will continue to be the best location for midstream companies exposed to natural gas,” said Justin Carlson, vice president and managing director of research. Other key findings from EDC’s 2018 Guidance Outlook indicate that: •Impending 2018 midstream financial guidance announcements could deviate significantly from market expectations. •Overall adjusted-EBITDA forecasts skew positive vs. current market consensus, indicating midstream sentiment may be too pessimistic. •Pessimistic midstream sentiment, higher production growth and natural gas contract risk are three major themes that will drive the midstreamsector in 2018.
scale, everyone would realize that the Permian was going to run out of crude takeaway capacity. Because the pipeline projects EPIC was proposing required more than a year of lead time, it still wasn’t easy to get producers to see the future at first. To help producers become part of the EPIC pipeline, the team created a unique offering. According to Dorrow, EPIC has created a co-op structure for the initial shippers signed up for the pipeline. Typically, shippers committed to a pipeline must pay deficiency payments when they fail to provide their committed volumes to the pipeline. However, because the EPIC line is set-up like a co-op, the initial folks who sign-up to ship crude will not be subject to deficiency payments, Dorrows says. “Our group believes in the Permian. We believe that at no point will our pipeline ever be less than a third full.” Those same initial shippers will also hold an equity stake in the pipeline. In addition to
Headlines Reveal The Need For Midstream Infrastructure Houston midstream companies form DJ Basin JV Noble Midstream Partners and Greenfield Midstream partnered on an acquisition of existing midstream assets in the DJ Basin. Their plan is to expand operations after completing the deal. Jeremy Ham, CEO of Greenfield noted that “the DJ Basin is one of the fastest growing plays in the country.”
ONEOK, Martin Midstream partner on $200M Delaware Basin pipeline Partnering on the 120-mile, 16-inch pipeline capable of moving 110,000 barrels of natural gas liquids per day puts the duo in a position “for significant future NGL volume growth,” according to Terry Spencer, president of ONEOK.
Permian producer Callon finds midstream asset management group Brazos Midstream will own and manage the midstream infrastructure assets of Callon Petroleum Co., a Permian pure-play E&P. Stephen Luskey, chief commercial officer of Brazos called the Permian “one of the most promising regions in the entire midstream services industry.”
New Stakeholder gathering system to serve Permian, San Andres Stakeholder Midstream is planning to build a crude and NGL gathering system for Permian producers working in the San Andres. Gaylon Gray, co-CEO at Stakeholder said, “operators are accelerating their drilling schedules.”
NuStar Energy to expand capacity of Permian crude system With oil throughput volumes approaching capacity on its existing Permian Basin crude system, NuStar has proposed adding another 70,000 barrels per day to its existing infrastructure.
ONEOK to build $1.4 billion Elk Creek pipeline to aid Bakken The Dakota Access Pipeline has solved all of the Bakken’s takeaway issues. With NGL and oil volumes once again pushing the capacities of existing infrastructure, ONEOK is planning to build a new $1.4 billion pipeline to move NGLs out of the region to an interconnect in Kansas.
Global energy trader eyes crude terminal project to move Texas shale
Vitol, the global energy and commodity trader that was the first to export U.S.-based shale oil to Europe, wants to do more. With Harvest Pipeline Co., Vitol intends to build a crude oil terminal at the Port of Corpus Christi to enhances its export abilities. 24 NORTH AMERICAN SHALE MAGAZINE ISSUE 1 2018
Phillips 66, Enbridge plan West Texas crude pipeline The combined effort could create the Gray Oak pipeline. The new infrastructure would be capable of moving 385,000 barrels of crude per day to terminals along the Texas Gulf Coast.
Magellan’s new proposal: connect Permian, Eagle Ford to Texas coast Based on shipper demand, Magellan Midstream believes it can build a gathering system to move Eagle Ford and Permian crude—up to 600,000 bpd—to the Port of Corpus Christi. The pipeline could be completed by the end of 2019.
Morgan Stanley, former ETP president partner on Midcontinent project Durando Midstream, now led by the former president of Energy Transfer Partners, has partnered with Morgan Stanley Energy Partners to build out more midstream infrastructure in the SCOOP/STACK where the team said there are “exceptional opportunities presented by nearby oil and gas producers.”
EVX Midstream announces Eagle Ford crude oil project In McMullen County, Texas, EVX will build a crude gathering line in conjunction with a large operator in the area. The company has already said it is looking for more projects in 2018.