The Operators:  Genesis Energy

The Operators: Genesis Energy

Since its formation in 1996, Houston-based Genesis Energy has built a powerful onshore and offshore midstream network that primarily caters to refiners. The company operates four divisions that include offshore pipeline transportation, onshore facilities and transportation, marine transportation, and sodium minerals and sulfur services.

Genesis Energy

Genesis Energy, L.P., is a growth-oriented master limited partnership headquartered in Houston, Texas.  Through their four divisions: offshore pipeline transportation, refinery services, marine transportation and onshore facilities and transportation, they provide an integrated suite of services to refineries, oil producers, and industrial and commercial enterprises. Their operations are primarily located in Texas, Louisiana, Arkansas, Mississippi, Alabama, Florida, Wyoming and the Gulf of Mexico.

Not surprisingly, demand destruction from COVID-19 has bee-stung all of Genesis’ operating segments this year with refiners hit hard, June’s Tropical Storm Cristobal in the La., Gulf wreaking havoc, and global orders of soda ash—a critical industrial component—cancelled for the rest of the year. Genesis, however, responded quickly by eliminating $33 million in debt during 2Q, delaying projects, tucking away cash flow, and confirming go-aheads of several major offshore projects already contracted to the company’s infrastructure in the Gulf.

Here’s a look at the company’s operations:

Offshore Pipeline Transportation

Genesis owns, and owns interest in, 2,400 miles of offshore crude oil pipelines that transport oil and natural gas from the Gulf of Mexico to onshore refining centers in Texas and La. Its offshore natural gas assets include 1,000 miles of pipe that primarily service deepwater production in the Gulf of Mexico and flow supplies to downstream pipelines or processing facilities. Genesis also holds interests in 19 offshore platforms in the Gulf that are used as hubs and production handling and pipeline maintenance facilities.

Onshore Pipelines and Terminals

With pipelines, storage, and multi-modal transportation options, Genesis operates a wealth of crude oil and refined products midstream infrastructure in Texas, La., Ark., Miss., Ala., Fla., Wyo., and the Gulf of Mexico. The company’s assets include 450 miles of crude oil pipelines in Ala., Fla., La., Miss., and Texas; four crude oil loading/unloading facilities in La., Fla., and Miss.; access to a suite of more than 200 trucks, 400 trailers, 504 railcars, and 4.3 MMBbls of storage capacity along the Gulf Coast; and 270 miles of CO2 pipelines in Miss.

Marine Transportation

Genesis Marine serves refineries and storage terminals along the Gulf and East coasts, Canada, the Great Lakes, Intracoastal Canal, and the nation’s western river systems where it also owns terminals. The company offers both inland and offshore fleets that include 130 vessels along with 82 inland and nine offshore barges.

Sodium Minerals and Sulfur Services

The company divides this segment into two businesses—Alkali and Refinery Services—with Alkali being the newest addition in 2017 to the Genesis family. And it’s kind of a big deal. Genesis’ Alkali is the largest leaseholder of the world’s largest known deposit of trona ore found in Green River, Wyo. Trona ore is a mineral that contains soda ash, which—once refined—is used in numerous applications including glass manufacturing, fiberglass insulation, coloring agents, synthetic detergents, and fertilizers. But soda ash also is used in the removal of sulfur dioxide and hydrochloric acid from stack gases. With two manufacturing sites and seven processing facilities in Wyo., Genesis produces more than 4 million tons of soda ash per year.

The company’s Refinery Services offers engineering, design, and construction, as well as treating and processing sour gas.

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Enterprise Products Still a Billion-Dollar Baby

Enterprise Products Still a Billion-Dollar Baby

In a world of… No wait, that’s a movie promo. Nevertheless, the phrase aptly describes the state of every sector of the oil and gas industry that’s landed in this Brave New World of adaptation, mutation, transformation, and innovation. As we well know, many have not survived this iteration of “Survivor” when comparing the reality TV show to the reality shale operators, midstreamers, and downstream players now find themselves in. Many more are expected to succumb to its ravages until Planet Earth conquers COVID-19, restoring demand and prices. But others, like midstream giant Enterprise Products, proves it can ride out the storm and still make a buck or a billion.

Enterprise Products

Enterprise Products Partners L.P. is an American midstream natural gas and crude oil pipeline company with headquarters in Houston, Texas. It acquired GulfTerra in September 2004. The company ranked No. 105 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.

Houston-based Enterprise Products has announced wrapping up 2Q with $1 billion in profit. This marks eight consecutive quarters the company has scored a billion-dollar win. 2Q also allowed the company to generate $1.6 billion in cash flow, 9.6 MBPD of pipeline volumes, record NGL fractionation volumes of 1.2 MBPD, and NGL export volumes of 701 MBPD.

Was everything rosey for Enterprise this quarter?  Of course, not.

Prices for fuels cratered, exports fell precipitously low due to global demand destruction, and feedstock availability for its petrochem facilities suffered a hard pinch. But when Enterprise saw an opportunity to lease its storage capacity during The Great American April Oil Glut, the company jumped, which hedged in part the weaknesses in its natural gas gathering, processing and petrochemical businesses.

Since the first of the year, Enterprise has mantled several achievements that keep this diversified midstream operator one of several that have managed to keep pace during a rolling tide. Here’s a quick look:

January 2020

  • Enterprise loads its first vessel at new ethylene export terminal
  • Begins service at isobutane dehydrogenation plant
  • Begins service at Mentone natural gas processing plant
  • Begins service at natural gas processing plant in East Texas
  • Reports record 2019 financial results

February 2020  

  • Extends open season on an expansion of the company’s Seaway Pipeline from Cushing, Okla., to the Texas Gulf Coast to flow 200,000 BPD

June 2020

  • Loads a record 175 million pounds of ethelyne exceeding loading capacity for the month Expects to complete construction of an aboveground ethylene tank by end of year to bring total loading capacity to an annual 2.2 billion pounds.
  • Enters into a long-term agreement to supply polymer grade propylene Japan’s Marubeni Corporation from the company’s PDH 2 facility near Mont Belvieu. Once completed in 2023, PDH 2 will have the capacity to upgrade 35,000 BPD of propane into 1.65 billion pounds per year of polymer grade propylene.

July 2020

  • Enterprise declares an industry first when it co-loads a combination of NGLs and olefins on the same vessel at its Morgan’s Point export terminal.

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Taking the Plunge Never Sounded So Good

Taking the Plunge Never Sounded So Good

History proves that times of crisis and turmoil inspire ingenious ideas, amazing inventions, and bold leaps of faith despite the odds that would otherwise subvert them. When the Bubonic plague struck England in 1665 forcing the closure of Cambridge University, mathematics professor Isaac Newton returned home where his brain went into overdrive upon witnessing an apple fall from a tree. A heady example to be sure, but we’re living in a brave new world now where a number of upstream and midstream businesses are biting the bullet and taking those leaps even as the industry reconstructs itself.

Tivoli Midstream

Comstock Resources

Wheat Energy Partners

Tivoli Midstream

Three guys and a big opportunity have determined now’s the perfect time to launch a terminal and logistics venture to serve big oil and gas and petrochemical customers. Houston-based Tivoli Midstream, a new portfolio company of private equity firm Energy Spectrum Capital, announced its formation July 15. Tivoli (named after a town east of Rome and not the Gulf Coast one; we got that confused, too) looks to acquire, build, redevelop and own strategically located storage facilities and marine terminals near key hubs. The industry veterans behind the business offer up significant experience overseeing marine terminals, production plant logistics, and handling more than 200 different chemical products, refined products, crude oil, renewable products, and dry-bulk commodities.

Jerry Jones and Comstock Resources

You already know him as the proud papa owner of the Dallas Cowboys, but Jerry Jones also views his Texas-based Comstock Resources as a second competitive playing field. Jones places his billion-dollar bucks on the Haynesville shale play where volumes of natural gas find an easy trajectory by pipelines to the Gulf Coast. Comstock a year ago acquired Dallas-based Covey Park, adding more than 700 MMCFD of production and 2.9 TCF of proved reserves to its already sizable East Texas assets. Amid production cuts, well shut-ins, and diminished filings of new drilling permits in Texas, Comstock is now saying, “Next!” by filing four drilling permits in a week.

Wheat Energy Partners

Travis Wheat makes his home in Amarillo as an entrepreneur and multi-company CEO who just happens to be a landman in love with oil and gas. Kickstarting in 2018 his Dallas-based Wheat Resources, Wheat is among the young-buck upstreamers at a moment when many E&Ps his size have said, “We’ll be back after this commercial break.”

As president and CEO of Wheat Resources and Trigo Oil and Gas, and president of Wheat Energy Partners, Wheat has announced it not only will drill its first well in the Permian’s Delaware sub-basin, but four. With a capital commitment from Stronghold Resources Partners, Wheat specializes in oil and gas production, lease acquisition, due diligence for mineral and surface ownership, and lease negotiations and mineral receivership.

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The Money Backers: Turnbridge Capital Partners

The Money Backers: Turnbridge Capital 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.

With offices in Dallas and Houston, Turnbridge Capital Partners has carved out a niche in the oil and gas industry with investments exclusively in the energy services and equipment sphere. This private equity firm targets service providers and manufacturers whose customers lie in the upstream, midstream and downstream sectors, and looks for investment opportunities between $25-$100 million.

Turnbridge Capital Partners

Turnbridge Capital Partners is a private equity firm targeting investments in middle-market service providers and equipment manufacturers that sell into the energy and infrastructure industries.

Cimarron Energy

Cimarron is a leading manufacturer of engineered production, process, and environmental equipment for the upstream and midstream energy industries.

Among its nine portfolio companies, Houston-based Cimarron Energy has experienced a serious growth spurt that expands its footprint in emissions control and environmental systems in a big way. With the recent announcement of the company’s second acquisition inside of a year, financial backer Turnbridge is clearly putting its chips on the latest process technologies to reduce emissions across the oil and gas complex.

A quick look:

  • Cimarron in July 2019 acquired Midland, Texas-based Hy-BON/EDI, which specializes in low-pressure gas management systems. According to the company’s history, the founder developed the first vapor recovery unit back in 1952. Today, Hy-BON/EDI’s product offerings include gas booster systems, casinghead pressure reducing units, compressor packages, and VRUs that operate in more than 20 countries.
  • Fast forward to May 2020 and Cimarron’s acquisition of Austin-based Aereon, which engineers flares, enclosed combustors, thermal oxidizers, and VRUs found in more than 46 countries.
  • Combined, the two acquisitions catapult Cimarron Energy from a nationwide supplier to a global provider with offices on four continents and a multi-brand recognition that lifts this 50-year-old manufacturer into the stratosphere.

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