The Operators:  Bluewing Midstream

The Operators: Bluewing Midstream

Storage of crude oil and refined products has now become a Spandex-tight issue for producers in the busiest basins looking to stash their goods amid skyrocketing inventories. Pipeline companies are urging E&Ps to cut back production to not risk further man-made declines of prices. Meanwhile, midstream operators that offer storage capacity face an interesting turn of events in which one journalist summed up, “Storage tends to be a ho-hum business, until it isn’t.”

Bluewing Midstream

Bluewing Midstream LLC was founded in July of 2015 with the aim to acquire, develop, and operate bulk liquids terminals along the Gulf Coast. Headquartered in Houston TX, they have partnered with Energy Spectrum – a well-established private equity firm located in Dallas, TX. First acquired in October 2016, terminals are strategically located in Brownsville, TX to serve the South Texas, Mexico, and other international markets.

www.bluewingmidstream.com

On the refined products side of the equation comes Houston-based Bluewing Midstream. Led by company president Todd Reid, whose roots trace back to years spent as a successful Chicago floor trader, Bluewing five years ago snatched up seven storage tanks from a Brownsville, Texas, operation going out of business. Reid knew that a lot of end users for jet fuel and gasoline, like airports and big gas stations, couldn’t buy fuel directly from a refinery. Instead, they bought their fuels from a trader. Bing!

At the time of purchase, Bluewing’s acquired tank farm offered a mere 50,000 Bbls of storage for refined products. But with a cash infusion in 2015 of $100 million from Dallas-based, private-equity firm Energy Spectrum Capital (which we’ll highlight in our ongoing series The Money Backers), Bluewing set off to expand its terminal footprint to include diesel, gasoline, base oil, wax, jet fuel, LPGs and ethanol to serve not only South Texas but Mexico and international markets. The company’s Phase II expansion last year added 300,000 Bbls of new liquids storage capacity for a current 1.1 million Bbls overall. With barge, rail and truck capabilities, Bluewing now offers 57 storage tanks approximately two miles from Mexico. Phase III of its bulk liquid terminal is in the wings to add another 1.19 MMBbls of new storage capacity.

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The Money Backers:  Global Infrastructure Partners

The Money Backers: Global Infrastructure Partners

In RMR’s continuing series The Money Backers, we give readers a glimpse of who’s who and who owns what in energy’s private equity world.  From the largest to the smallest to the newest, we look especially at those firms making hay in the midstream industry to provide the capital infusion required to give growth projects liftoff.

Global Infrastructure Partners

Global Infrastructure Partners is an infrastructure investment fund making equity and selected debt investments. GIP is headquartered in New York City and its equity investments are in infrastructure assets in the energy, transport and water/waste sectors.

www.global-infra.com

N.Y.-based Global Infrastructure Partners (GIP) joins an elite group of private-equity firms that tether their investments to core infrastructure around the world. From international airports to power plants in South America and marine hubs in Australia, GIP also backs an A-list of energy players in the U.S. that operate critical bones in the oil and gas, LNG, water, wind, solar, and renewables sectors. With a portfolio of 14 active investments, the firm is considered one of the world’s largest infrastructure investors managing $74 billion in assets.

Let’s look at GIP’s midstream portfolio companies that call the U.S. home.

  • Based in Dallas, EnLink Midstream finds its niche in the Permian Basin, North Texas, Okla., the Ohio River Valley, and the Gulf Coast, where it operates 12,000 miles of oil and gas gathering and transportation pipelines; 21 processing plants with 5.3 BCF of capacity; seven fractionators; barge and rail terminals; storage facilities; disposal wells; and an extensive crude oil trucking fleet.
  • Texas-based Freeport LNG, which just recently began flowing feed gas into the terminal’s third train, is now developing Train 4 that will allow export of an additional 5 MTPA of LNG and increase the project’s total export capability to more than 20 MTPA.
  • Houston-homed Hess Midstream plays ball in the Bakken and Three Forks shale plays in the Williston Basin, where it operates 1,600 miles of oil, gas and water gathering line, the Hawkeye Gas Facility with the capability to compress 50,000 MCFPD of natural gas, extract NGLs and remove water vapor; and the Hawkeye Oil Facility, a crude oil pumping and truck unloading center.
  • Medallion Gathering & Processing, based in Irving, Texas, is the largest privately held crude oil transportation system in the Midland sub-basin but also holds natural gas assets. The company’s Midland and Delaware infrastructure include nearly 900 miles of crude oil gathering and transportation pipelines, 10 stations with storage and truck unloading facilities, 150 miles of natural gas pipe, two processing facilities, and five compressor stations.

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Rate Case Settlements to Boost Enable’s MRT Service Revenues

Rate Case Settlements to Boost Enable’s MRT Service Revenues

The good news came this week for Okla. City-based Enable Midstream, which received FERC approval of its rate case settlements with all firm-capacity customers of the company’s Mississippi River Transmission system (MRT). In anticipation of the approval, Enable announced in February it expects 2020 revenues from MRT to increase by $7 million, or $87 million this year. The settlements also include contract extensions for most firm transportation and storage customers filling 90% capacity through July 2024. Enable says the settlement rates will provide a financial return on historical upgrades and expansions of the system, as well as ongoing operating costs and rate certainty for customers.

Enable Midstream

Enable Midstream Partners, LP is a publicly traded Master Limited Partnership (MLP) where approximately 1,900 employees focus on providing customers timely, reliable and affordable solutions. They were formed as a joint venture by affiliates of CenterPoint Energy, Inc., OGE Energy Corp and ArcLight Capital Partners, LLC in May 2013.

www.enablemidstream.com

Coming soon to FERC will be Enable’s application for its Gulf Run Pipeline project, which the company looks to file at any time. Gulf Run would provide 1.7 BCFD of pipeline capacity to transport a committed 1.1 BCFD of natural gas to the Golden Pass LNG terminal currently under construction to add export capabilities. Located in Sabine Pass, Texas, the $10 billion Golden Pass is a joint venture between ExxonMobil (30%) and Qatar Petroleum (70%). Project completion is expected in 2024.

Enable Midstream operates 14,000 miles of natural gas, crude oil, condensate and produced water gathering pipelines, 7,800 miles of interstate pipelines, 2,300 miles of intrastate pipelines, and eight natural gas storage facilities with 84.5 BCF of capacity.

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Energy’s Invisible Hero Just Might Be Midstream

Energy’s Invisible Hero Just Might Be Midstream

​The U.S. government deems 16 sectors of our nation’s economy as critical infrastructure, citing that—without a stable energy supply—health and welfare are threatened, and the economy cannot function. The midstream industry, in particular, bench presses virtually every business, household and community to ensure vital fuels are gathered, transported, processed, refined and exported wherever they are needed. Which is every day. Around the clock. All year long. Our nation’s dependence on energy infrastructure isn’t simply limited to growth and production that keep our economy alive and breathing, but to our very way of life.

In its most recent summary of U.S. critical infrastructure, the Department of Energy describes the energy sector as a “lifeline function upon which all other critical infrastructures rely,” including national security.

The DOE divides the nation’s energy critical infrastructure into three segments: electricity, oil and natural gas—all of which depend on midstream bones. Pipelines serve as the arms and legs of our energy’s critical infrastructure doing most the heavy lifting to distribute the oil and gas supplies that feed the economy, regardless of commodity prices, geopolitical squabbles, or a global pandemic. Their function goes on almost invisibly. And where, merely a few years ago, America faced aging and insufficient energy infrastructure, or a void altogether, the shale revolution launched a midstream calvary of new and expanded gathering and transmission lines, processing plants, and export terminals to connect supplies with demand.

We’ve met—and are still meeting—more need in the midstream space, along with implementing new technologies, enhanced safety protocols and cyber security, creating the most advanced energy infrastructure in the world. And so, the rhythm of the midstream industry to prevent disruption in our daily lives plays on. Even if most don’t see it or give it a second thought.

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Come Together:  Align and Elevate Midstream

Come Together: Align and Elevate Midstream

In our state of self-isolation and social distancing right now, it’s an opportune time to look at where our nation’s midstream operators stand and what they might be looking at in the month’s ahead. We’ve seen our majors take a hatchet to capital expenditures this year—and RMR will delve into that in the days following. But for today, we’re looking at two midstream companies who’ve recently come together to add infrastructure strength to the Haynesville.

Elevate Midstream

Headquartered in Houston, Elevate Midstream Partners II is a private midstream services company focused on providing responsive, scalable, value-enhancing midstream solutions to exploration and production customers. 

elevatemidstream.com

Align Midstream

Align Midstream Partners is a Dallas-based midstream company focused on serving producers’ needs in emerging and established basins within the US. Align is concentrated on building greenfield midstream assets including gas, crude oil and water gathering pipelines, treating and gas processing plants, and salt water disposal wells in emerging basins.

www.alignmidstream.com

Is it surprising anymore when private-equity firms merge two of their portfolio companies building and operating midstream infrastructure in the same basin?  Probably not. Better to be growing that midstream platform than stirring up competition and cannibalism in the current landscape. And so it is for Tailwater Capital, which late last year combined Dallas-based Align Midstream and Houston-based Elevate Midstream—darn near kissing cousins in the Haynesville shale play with gas gathering, treating and processing assets. Following the merge, Tailwater set Elevate free, gifting the midstreamer with a $150 million equity commitment to seek out new acquisitions and greenfield development, while Align set forth to expand the now combined-company’s footprint.

A little backstory on this if you’re taking notes.

Elevate in 2018 acquired the assets of Woodland Midstream Partners and the Orion Pipeline, which consist of gas gathering, treating and processing assets in East Texas. This included 180 miles of pipeline, 19,000 Hp of compression, an 80 MMCFPD processing plant, and related dehydration and NGL stabilization equipment.

Align, on the other hand, operates a gas gathering pipeline system and a 400 GPM amine facility with more than 200 MMCFPD of residue takeaway with NGPL and Gulf South pipelines. The merged assets will provide extra processing and compression capabilities, including daily volumes of more than 300 MMCFPD. Align also plans to add approximately 180 miles of pipeline across Panola, Rusk and Harrison counties.

Can’t wait to see what lies ahead for Elevate Midstream in the Haynesville. We’ll stay tuned.

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