Tallgrass Revs Up Its Cheyenne Connector

Tallgrass Revs Up Its Cheyenne Connector

Kansas-based Tallgrass Energy has announced that both its Cheyenne Connector pipeline and Rockies Express Pipeline (REX) Cheyenne Hub Enhancement Project have now begun commercial service. Tallgrass and DCP Midstream each hold a 50% interest in the 70-mile Cheyenne Connector, which flows natural gas supplies from processing facilities in the DJ Basin in southern Weld County, Colo., to the REX Cheyenne Hub south of the Wyo., border. There, the REX Pipeline connects and intersects with numerous other pipelines—including several that Tallgrass has modified for bi-directional flow—and provides DJ gas first firm access to West, Midwest, Southeast and Gulf Coast markets. DCP is one of the largest oil and gas operators in the DJ.

Tallgrass Energy

Tallgrass Energy, LP is a growth-oriented midstream energy company, transporting crude oil and natural gas from some of the nation’s most prolific basins in the Rocky Mountains, Upper Midwest and Appalachian regions with access to major demand markets in the Rockies, the Midwest, eastern Ohio and points beyond.

www.tallgrassenergy.com

The Cheyenne Connector is fully subscribed at 600 MMCFD. The REX Hub offers 800 MMCFD of capacity with 200 MMCFD expected to be placed into service during 4Q this year. The REX Pipeline, co-owned by Tallgrass and Phillips 66, is among the largest natural gas pipelines in the nation, extending 1,700 miles from northwestern Colo., and Wyo., to eastern Ohio.

Tallgrass Energy owns and operates more than 8,300 miles of natural gas pipelines, 850+ miles of crude pipe, and 300+ miles of water pipeline across the Rockies, Upper Midwest, and Appalachia. Additional projects include the proposed 700-mile Seahorse Pipeline that will transport 800,000 BPD of crude from the Cushing, Okla., hub to the La., Gulf Coast. The 80-mile Iron Horse Pipeline will move crude from the Powder River Basin to the Guernsey, Wyo., oil hub.

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The Money Backers:  Warburg Pincus

The Money Backers: Warburg Pincus

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.

Warburg Pincus

Warburg Pincus LLC is a New York-based private equity firm focused on growth investing with offices in the United States, Europe, Brazil, China, Southeast Asia and India. It has been a private equity investor since 1966.

www.warburgpincus.com

With more than $54 billion in managed assets, global powerhouse Warburg Pincus spreads its investment wealth across seven industries that range from retail diamonds in India to real estate across Asia. This private equity firm also counts energy as a primary focal point with 31 portfolio companies in the upstream, midstream, downstream, electrical power and renewables sectors. Since the late 80s, Warburg Pincus has invested or committed $10+ billion in energy-related companies and infrastructure projects around the world.

In the U.S. midstream space, WP banks on natural gas and Navitas Midstream. Based in The Woodlands, Texas, Navitas operates more than 1,800 miles of gas gathering pipelines and five cryogenic gas processing trains in the Permian Basin. Through newbuilds and acquisitions, Navitas in less than six years has created one of the Permian’s busiest midstream complexes serving the Midland. The company in 2019 completed its latest gathering project in southern Glasscock and northern Reagan counties that includes 34 miles of pipe with 200+ MMCFD of capacity and 25,000+ hp of three-stage field compression.

Warburg Pincus’ upstream investments in the U.S. include Antero Resources (Marcellus and Utica), Chisholm Energy (Permian, northern Delaware),  Ensign Natural Resources (Permian, South Texas), Hawkwood Energy (Rockies and Mid-Continent), Independence Resources Management (Permian, Anadarko), and Laredo Petroleum (Permian, Mid-Continent).

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Gathering Buildout Continues in the DJ Basin

Gathering Buildout Continues in the DJ Basin

With completion well within sight of its Rattlesnake pipeline extension, Denver-Based Taproot Energy has secured an additional 60,000 dedicated acres in the DJ Basin’s Weld County to provide crude oil and water midstream gathering and transportation services to producers there. The new acreage dedication from Mallard Exploration is located near Taproot’s other acreage dedications from Bison Oil & Gas, Verdad Resources, and Bonanza Creek Energy along the Baja multi-production midstream system. The agreement with Mallard brings Taproot’s total dedicated acreage in the DJ to more than 200,000 gross acres.

Taproot Energy

Taproot Energy Partners is a diversified and innovative midstream company comprised of a team of individuals who bring a wealth of experience in developing optimized midstream assets. TEP’s core competencies are in oil & gas gathering, transportation, processing, treating and liquids handling.

www.taprootep.com

When completed, Taproot’s Baja System—along with its Rattlesnake Extension 35 miles south—will include more than 110 miles of crude oil, natural gas, produced water and freshwater pipelines. Rattlesnake will enable crude suppliers first-time, direct access to Tallgrass Energy’s Buckingham Terminal with pipeline connections to Midwest refiners and the Cushing, Okla., hub. The Rattlesnake leg is expected to go online this quarter.

Taproot also looks to construct a truck unloading and storage facility in Weld County to provide shipper customers with a local crude oil delivery point.

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The Operators:  Outrigger Energy

The Operators: Outrigger Energy

Outrigger Energy knows when and where to pounce when it comes to greenfield midstream infrastructure in basins that sorely need it. Six years ago, this Denver-based operator swooped into the Permian where it constructed gathering pipe and gas plants in two of the basin’s richest growth areas. The company’s Delaware system included more than 140 miles of natural gas gathering pipeline, a processing facility with 70 MMCFD of capacity, and a crude gathering system with 40,000 BPD of capacity. The Outrigger Midland consisted of 100 miles of gas gathering pipeline, 10 MMCFD of processing capacity, and a crude gathering system with 40,000 BPD of capacity. Both were sold in 2017 to Houston-based Targa Resources for a dandy $1.5 billion.

Outrigger Energy

Outrigger Energy II LLC is a private, full service midstream energy company specializing in greenfield project development with current systems operating and under construction in the DJ and Williston Basins.  The company was formed in 2017 after Outrigger Energy LLC sold its assets to Targa Resources and Tallgrass Energy Partners.

www.outriggerenergy.com

Within a year of initial construction of Outrigger’s Permian assets, the company leaped on a new opportunity in the Powder River Basin where it built a complete wellhead-to-market crude oil gathering system that included pipelines, pumps, measurements and other facilities for a capacity of up to 60,000 BPD. That system also was sold in 2017 to Kansas-based Tallgrass Energy.

Then in 2018, Outrigger began development of a tri-stream midstream system in the DJ Basin to handle natural gas, crude oil, and produced water. The 60 MMCFD cryogenic processing plant, gas gathering pipe, and crude oil and produced water gathering system began service after only eight months from the start of construction. The DJ project, certainly closer to Outrigger’s Colo., home, became the company’s first telltale that it planned to narrow its geographic focus to the Rocky Mountain region.

Now, after inking a long-term gas gathering and processing agreement with Exxon Mobil’s XTO, Outrigger is headed to the Bakken where it’s building a 70-mile natural gas pipeline and initial 250 MMCFD cryogenic plant. The processing facility will offer ethane recovery and rejection capabilities with direct access to the Northern Border Pipeline for residue gas and ONEOK’s NGL pipeline.

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Midstream Projects Approved in the Bakken; Saudi Oil Imports Hit the Gulf Coast

Midstream Projects Approved in the Bakken; Saudi Oil Imports Hit the Gulf Coast

RMR features the latest high-point news to keep you to up to date with midstream activities happening in the basins and shale plays that matter to you most.

Construction Gets Underway for More Bakken Midstream Infrastructure

In the wake of  COVID-19, oil and gas production in the Bakken has been slashed to the likes of a Friday the 13th horror movie. Okla. City-based Continental Resources, the largest E&P operator in the N.D.-Mont., shale play, recently shut-in 70% of its output, cutting nearly 150,000 BPD in May and June. Others have been soon to follow. Nevertheless, Denver-based Outrigger Energy, which operates pipelines, gas plants and water management systems in the DJ and Williston basins, has just received regulatory approval to move forward with its latest Bakken ventures. The company looks to construct the $4.6 million, 4.7-mile Alliance Sales Pipeline—an extension of its 2,391-mile Alliance Pipeline—as well as build a new $150 million gas processing plant. Both are expected to go online at year end. The Alliance Pipeline flows natural gas from Western Canada and the Willison to the Chicago market hub. The Alliance Sales Line will have a capacity of 80 MMCFD.

Saudi Oil Anchors at the U.S. Gulf Coast

A flotilla of 17 VLCCs loaded with Saudi crude has quietly begun to arrive. Five have already reached ports in La., and Texas, and 14 others will be quick to follow filled with a combined 28 MMBbls that will reach the Gulf Coast between now and the end of June. As a reference point, the U.S. has imported 6.7 MMBbls from the kingdom every month for the last 12 months. For the time being, supplies will be stored on those tanker ships (cha-ching) as the politics behind unloading has ignited a firestorm. Of note, approximately 146 MMBbls of storage in the Gulf Coast region remains available. As of the end of April, nine E&Ps have rented emergency space at the Strategic Petroleum Reserve to store 23 MMBbls of oil. The SPR has a storage capacity of 714 MMBbls. Meanwhile, the Dept. of Energy has just announced it will purchase 1 MMBbls of crude now stowed at the SPR after initially asking to purchase 70 MMBbls then 30 MMBbls to help producers.

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