ONEOK Builds Up the Bakken

ONEOK Builds Up the Bakken

Adding to its nonstop $10 billion Bakken buildup, ONEOK announced last May more than $2 billion in new gas projects. With two of those projects now complete, the company is back with a slate of more expansions to meet increasing gas production.

ONEOK

ONEOK, Inc. is a diversified Fortune 500 corporation based in Tulsa, Oklahoma. ONEOK was founded in 1906 as Oklahoma Natural Gas Company, but It changed its corporate name to ONEOK in December 1980. It also owns major natural gas liquids systems due to the 2005 acquisition of Koch Industries natural gas businesses.

www.oneok.com

ONEOK’s 900-mile Elk Creek Pipeline began flowing NGLs in December from the Williston Basin to the company’s fractionation, terminal and storage facility in Bushton, Kan., with an initial capacity to transport up to 240,000 BPD of unfractionated NGLs. In January, the company announced completion of its second Demicks Lake Gas plant. Both plants offer a combined 400 MMCFD of capacity. But there’s no rest for the weary in an area where midstream infrastructure has yet to meet production demand.

For its part, ONEOK recently announced plans to construct a third Demicks Lake processing plant with an initial capacity of 200 MMCFD, as well as expand its Bear Creek plant in the Williston Basin by 200 MMCFD. The company also will add 10 pump stations along its Elk Creek Pipeline to boost capacity to 400,000 BPD by 2021. According to the North Dakota Pipeline Authority, that expansion “will be necessary in order to keep pace with growth.”

The latest figures suggest the current log of midstream projects are on track to meet production levels until 2023. North Dakota currently produces more than 600,000 BPD of NGLs.

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Parallel Pipelines of EPIC Proportion

Parallel Pipelines of EPIC Proportion

For a fledgling player, San Antonio-based EPIC Midstream seems born to run. The company’s initial announcement four years ago declared an intent to build the longest parallel pipeline since 2008 from West Texas to the Gulf of Mexico. And it did. Conceived in 2017 to build, own and operate crude oil and NGL infrastructure in the Permian and Eagle Ford that would deliver supplies to the Gulf, EPIC has now announced completion of its 730-mile Crude Oil Pipeline that stretches from Orla, Texas, to the Port of Corpus Christi. There, EPIC is constructing a second dock on its marine terminal to export oil.

Epic Midstream

EPIC was formed in 2017 to build, own, and operate midstream infrastructure in both the Permian and Eagle Ford Basins. EPIC’s first two projects, the EPIC Crude Oil Pipeline and the EPIC Y-Grade Pipeline, will transport crude and Y-Grade across Texas for delivery into the Corpus Christi market.

epicmid.com

But let’s take a step back for just a moment. One foot outside the starting gate, EPIC announced two concurrent projects that included parallel pipelines running from the Permian and Eagle Ford to the Gulf. The EPIC Y-Grade NGL pipeline originally was built to link NGL supplies to the company’s Gulf Coast refiners, petrochemical plants and export markets. But in Aug. 2019—amid the drought of pipeline takeaway—EPIC ceased transporting NGLs on its line and instead began flowing 400,000 Bbls of crude from its fractionator at Crane, Texas, to terminals in Corpus and Ingleside. EPIC announced last December it will construct a second 110,000 BPD fractionator at the same complex. The line soon will return to flowing NGL.

Simultaneously, EPIC commenced its third open season last October for its 700-mile crude oil pipeline, traversing the same path to the company’s growing marine terminal. Now complete, the line offers an initial capacity of 600,000 BPD –expandable to 900,000—from the Delaware, Midland and Eagle Ford, to EPIC’s marine terminal, which ultimately will include 7.5 MMBbls of storage across the system. The West Dock is currently in service and can load Aframax-sized tankers capable of transporting up to 750,000 barrels at a rate of 230,000 barrels per hour. The East Dock, still under construction, will load Suezmax-sized tankers capable of transporting up to 1 MMBbls at a rate of 40,000 barrels per hour. The East Dock is expected to go online in the third quarter this year.

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The Money Backers: ArcLight

The Money Backers: ArcLight

In a nutshell, Boston-based ArcLight Capital Partners trains its eye and financial savvy on achieving midstream power. This private-equity firm has captured at least two industry headlines inside a week, announcing sizeable commitments to build and expand infrastructure and pipelines that are Gulf Coast bound.

ArcLight Capital Partners

Based in Boston, ArchLight’s investment team targets midstream, power and production opportunities with substantial growth potential, significant current income and meaningful downside protection, typically on a proprietary basis. They employ a hands-on value creation strategy that utilizes their in-house technical, operational and commercial specialists as well as their 1,500+ person asset management affiliate.

www.arclight.com

The first, a 50/50 joint venture with Midland, Texas-based Rattler Midstream to operate and expand the Yellow Rose natural gas gathering and processing system in the Permian with more than 84 miles of pipe and increased capacity to 40,000 MCFD. The project also will include construction of a new 60,000 MCFD processing plant, as well as incremental gathering and transportation pipelines. Rattler is not an ArcLight portfolio company but the two have bestowed their entity with a name that holds considerable bite—Amarillo Rattler.

The second, Houston-based Midcoast Energy’s CJ Express expansion project, which will add compression and pipeline facilities along Midcoast’s East Texas natural gas pipeline system extending from the Haynesville to the Gulf and increase transmission capacity to 1 BCFD.

Here’s a look at ArcLight’s 25 midstream portfolio companies:

  • AL Gulf Coast Terminals
  • BGH Holdings
  • Enstor
  • Lodi Holdings
  • NET Midstream
  • Offshore Infrastructure Partners
  • Pike Core Infrastructure
  • Ridgeline Midstream Holdings
  • Toga Offshore
  • Arkoma Pipeline Partners
  • Blue Ridge Asphalt
  • Gulf Oil
  • Magnolia Infrastructure Partners
  • North Sea Infrastructure Holdings
  • Perdido
  • RepconStrickland
  • SeaPort Midstream
  • Associated Asphalt
  • Bronco Midstream Holdings
  • Limetree Bay Holdings
  • Midcoast Energy
  • North Sea Midstream Partners
  • Petrotank
  • Republic Midstream
  • Southern Pines

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Phillips MLP Acquires Interest in $1.6 Billion Liberty

Phillips MLP Acquires Interest in $1.6 Billion Liberty

Houston-based Phillips 66 Partners just added a sixth pipeline joint venture to its operations portfolio with the purchase of a 50% interest in the Liberty Pipeline. The MLP has announced it will pay $75 million to Phillips 66 for one-half of the $1.6 billion Liberty in a transaction expected to close March 1. The 50/50 JV is shared with Wyo.-based Bridger Pipeline. Phillips 66 formed its MLP in 2013 to own, operate, develop and acquire primarily fee-based crude oil, refined products and NGL pipelines, terminals, and other midstream assets.

Phillips 66 Partners

Headquartered in Houston, Phillips 66 Partners is a growth-oriented master limited partnership formed by Phillips 66 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum products and natural gas liquids pipelines, terminals and other midstream assets.

www.phillips66partners.com

The 700-mile Liberty, which is scheduled for service in early 2021, will transport crude oil from the Rockies and the Bakken to the Cushing, Okla., hub with access to Gulf Coast destinations. Phillips expects the project will create up to 2,500 construction and 40 full-time jobs.

Other pipeline joint ventures under the Phillips 66 Partners’ banner include:

  • One-third equity interest in DCP Sand Hills Pipeline, which transports NGL from the Permian and Eagle Ford to fractionation facilities along the Gulf Coast and Mont Belvieu market hub. One-third equity interest in the Southern Hills Pipeline transporting NGL from the Midcontinent to facilities along the Gulf Coast and Mont Belvieu hub.
  • A 21.94% interest in the Explorer Pipeline, a refined petroleum products line that extends from the Gulf to Ind.
  • Two JVs with Paradigm to develop midstream logistics infrastructure in N.D., including the Palermo Rail Terminal and the Sacagawea Pipeline.
  • A 40% interest in the Bayou Bridge Pipeline, which transports crude from Beaumont, Texas to Lake Charles, La.
  • A JV with Plains All American, which owns and operates a crude storage terminal and pipeline that flows oil from the Sooner Trend, Anadarko Basin, and Canadian and Kingfisher counties to Cushing.

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