The Pipes, They Are A’Callin’
We are living in the age of the Big Buildout. Infrastructure is having a boom of its own. We share, from our recent “News Reviews” coverage, six months’ worth of pipeline announcements:
Midland-based Oryx Midstream Services will complete a new regional crude oil pipeline serving the Delaware Basin by year-end 2018. The 220-mile line will have receipt points at Carlsbad, Stateline, Pecos, and Pyote and delivery to Crane and Midland. There will be 16-, 20- and 24-inch lines serving each active county in the Delaware Basin.
San Antonio-based Andeavor started construction on the Conan crude oil gathering system in the Delaware Basin. It will be about 130 miles in length and transport crude oil from Lea County, N.M., and Loving County, Texas, to a terminal to be built in Loving County. Andeavor said commercial service is expected to begin in mid-2018. Phase I capital investment is $225 million.
Houston-based pipeline startup Permico Energia plans to build a 510-mile pipeline for NGLs from the Permian Basin and Eagle Ford shale regions to Corpus Christi. The $1.8 billion project would carry 330,000 barrels per day and include a fractionator to separate ethane, propane, and other liquids and a storage facility for 8 million barrels. The Midland Reporter Telegram said the pipeline would begin near Monahans with northwest lateral into southeastern New Mexico and northeast lateral to Midland-Odessa. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said, “Additional infrastructure is needed to connect these energy hubs to support increasing petroleum exports from the United States and key supply points.” Reuters said Permian NGL production is forecast to top 1.7 million bpd by the end of 2025 from the current figure of nearly 1 million bpd.
A subsidiary of Houston-based Plains All American Pipeline will expand portions of its pipeline systems to accommodate a volume increase of about 120,000 barrels of crude oil per day from the Delaware Basin and Midland to Cushing, Okla. The committed volume will move on a combination of new and existing pipelines. Plains will extend its Sunrise pipeline system, which now originates at Midland and connects with Colorado City, by building about 180 miles of 24-inch pipeline from Colorado City to Wichita Falls. Plains said the system will deliver to Plains and third-party terminals in Cushing. The additional capacity is expected to be operational in early- to mid-2019.
Irving-based Medallion Pipeline is expanding capacity of its existing crude oil pipeline system in the Midland Basin. The capacity of the Wolfcamp connector mainline system will nearly double from 105,000 barrels per day to 200,000 barrels per day, and expansion of the Howard lateral will increase capacity from 60,000 barrels per day to 85,000 barrels per day. Partial operation of the expansions is expected in 2017Q3 and full commercial operations in 2017Q4.
Houston-based Targa Resources will construct a new common carrier NGL pipeline, to be called Grand Prix, from the Permian Basin to its fractionation and storage complex at the NGL market hub in Mont Belvieu. Grand Prix will be supported by Targa’s volumes and other third-party customer commitments. Capacity will be 300,000 barrels per day, expandable to 550,000 b/d. The new pipeline is expected to be in service 2019Q2.
Fort Worth-based Brazos Midstream Holdings completed multiple crude oil and gas gathering and processing projects in the southern Delaware Basin. Brazos said it started operation of a natural gas processing plant, Comanche I (60 million cubic feet per day), several new compressor stations, and about 150 miles of large diameter, low- and high-pressure gas gathering pipelines. The Comanche I cryogenic natural gas processing plant and associated pipelines are located in Pecos, Reeves, and Ward counties. The projects also include the construction of 35 miles of crude oil gathering pipelines, two crude oil storage terminals with a combined capacity of 50,000 barrels, and connections to multiple downstream crude oil pipelines. Brazos also started construction of a second gas processing plant, Comanche II.
Houston-based Enterprise Products Partners plans to build a 571-mile pipeline to transport growing volumes of natural gas liquids from the Permian Basin to Enterprise’s NGL fractionation and storage complex in Mont Belvieu. The Shin Oak NGL pipeline will originate at Enterprise’s Hobbs NGL fractionation and storage facility in Gaines County. The 24-inch diameter pipeline will have initial capacity of 250,000 b/d expandable to 600,000 b/d. It is expected to begin operation in 2019Q2. Enterprise said its Mont Belvieu NGL complex is the largest of its kind in the world. It is connected by pipelines to the expanding U.S. petrochemical industry on the Gulf Coast and export terminals on the Houston Ship Channel. The Houston Chronicle said, “The new pipeline project is another sign that West Texas is booming again with oil and gas, and the Houston area is growing as the hub for those resources to either be processed or exported. Oil gets all of the attention, but the natural gas streams from the shale rock are used to create petrochemicals, electricity, or other products.”
Cypress-based NAmerico Energy Holdings plans to build a 468-mile natural gas pipeline from West Texas to Corpus Christi. The Pecos Trail pipeline (42-inch diameter) is designed to transport 1.85 billion cubic feet per day from the prolific Permian Basin to the Gulf Coast, a rapidly emerging destination for natural gas supply. NAmerico is developing the project with Cresta Energy Fund I. It is expected to being operation in 2019.
Houston-based Kinder Morgan Texas Pipeline will build a 430-mile pipeline for natural gas from Waha in West Texas to Agua Dulce near Corpus Christi. The Gulf Coast Express pipeline project is expected to be in service in the second half of 2019 with 42-inch pipe transporting up to 1.7 billion cubic feet per day of natural gas for local power generators and petrochemical plants, transport to Mexico, or export overseas as LNG.