Berkshire Hathaway Makes a New Deal-and It’s a Big One

Berkshire Hathaway Makes a New Deal-and It’s a Big One

In its largest deal in four years, conglomerate giant Berkshire Hathaway has scooped up the natural gas pipeline and storage assets from Dominion Energy in an all-cash deal valued at $10 billion. The announcement came concurrently with news that the utility giant would scrap its plans to build the 600-mile Atlantic Coast pipeline after years of costly regulatory and environmentalist battles. Two other proposed pipelines have been shelved this year in the eastern region.

Bershire Hathaway

Berkshire Hathaway is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States.

www.berkshirehathaway.com

Dominion Energy

Dominion Energy, Inc. is an American power and energy company headquartered in Richmond, Virginia that supplies electricity in parts of Virginia, North Carolina, and South Carolina and supplies natural gas to parts of Utah, West Virginia, Ohio, Pennsylvania, North Carolina, South Carolina, and Georgia. Dominion also has generation facilities in Indiana, Illinois, Connecticut, and Rhode Island.

www.dominionenergy.com

Dominion, the nation’s second-largest utility, serves 7 million natural gas and electrical power customers in 20 states from its headquarters in Richmond, Va. The company has set a net-zero emissions target by 2050, along with a five-year, $26 billion growth capital plan through ongoing investments in new technology, solar, wind, and renewable natural gas.

The sale to Berkshire Hathaway includes more than 7,700 miles of gas pipelines, 900 BCF of gas storage, a 25% interest in the bi-directional Cove Point LNG export terminal, and $5.7 billion in assumed debt. The conglomerate owns 10 other energy and energy-related companies as part of its Berkshire Hathaway Energy segment. Close of the Dominion deal is expected in 4Q this year.

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Enterprise Secures Long-Term Customer for Second PDH Plant

Enterprise Secures Long-Term Customer for Second PDH Plant

To the layman, Enterprise Products’ Mont Belvieu petrochemical complex just east of Houston speaks to an industrial process most find shrouded in mystery where steam puffs 24/7 amid lights that illuminate the wide Texas nightscape. But for those in the oil and gas industry, Enterprise’s Mont Belvieu complex is a steel-and-pipe engineering marvel that converts NGLs into the raw materials used to manufacture just about everything the layman uses.

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.

www.enterpriseproducts.com

Since its initial construction, the Enterprise complex has experienced a near non-stop expansion, adding more fractionators and capacity to meet growing global demand for the basic building blocks of commercial goods. And news from Enterprise’s Mont Belvieu facility also is ongoing with the company’s latest announcement of a long-term agreement with Marubeni Corporation to supply polymer grade propylene (PGP) from a second propane dehydrogenation plant (PDH2) still under construction.

Japan-based Marubeni is an integrated trading and investment conglomerate, as well as the world’s largest olefins trader. Olefins are the basis for polymers and oligomers used in plastics, resins, fibers, elastomers, lubricants, gels, solvents, detergents and adhesives.

Upon completion in 2023, PDH2, combined with six other Enterprise propylene fractionators, will have a total capacity to produce up to 11 billion pounds per year of polymer grade propylene. The company’s PGP assets include more than 300 miles of delivery pipelines, 26 connections, more than 5 MMBbls of storage, and a new export terminal that opened for business earlier this year.

To keep our subscribers up to date, here’s a look at the Enterprise NGLs wonderment so far in the last now seven months.

In RMR’s story The Enterprise That Grows Behind NGL Exports published earlier this year, we told you about the company’s inaugural ethylene cargo leaving from Enterprise’s new NGL export terminal along the Houston Ship Channel. Upon completion this year, the company’s ethylene facility at the Mont Belvieu complex will have enough capacity to produce 1 million mt/year. Enterprise at the time also announced plans to bring online two more fractionators to make propylene and isobutylene, as well as increase its ship-loading capacities of propane and butane from 32,000 barrels per hour to 40,000.

We then covered the start-up of Enterprise’s new isobutylene dehydrogenation (IBDH) plant at Mont Belvieu in our story Enterprise Advances U.S. NGL Exports. Once in full gallop, the IBDH will be capable of processing 25,000 BPD of butane into nearly 1 billion pounds of isobutylene a year. China and India are the largest importers. Enterprise’s isomerization complex is the largest of its kind in the nation and includes a 70-mile pipeline system to transport high-purity isobutane from Mont Belvieu to Port Neches, Texas.

As recently as June, we shared Enterprise, Navigator Set to Export Record Ethylene Tonnage, which they did, shipping 44 million pounds of ethylene to Japan.

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The Money Backers: Cresta Fund Management

The Money Backers: Cresta Fund Management

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.

Cresta Fund Management

Cresta Fund Management is a middle-market focused private equity firm with a conservative, value-added approach to infrastructure investing. It seeks to invest in hard asset transportation, storage, and processing businesses primarily in the energy, chemicals and water sectors.

www.crestafunds.com

Dallas-based Cresta Fund Management likes good infrastructure ideas, whether they’re hatched from startups or companies that have been around awhile. This private-equity firm exclusively targets mid-market midstream investments with assets that include oil and gas pipelines, processing, and storage. And, at least for now, Cresta has found those investments squarely in Texas with typical check sizes that range between $50 and $250 million. Founded in 2016, the firm currently holds six midstreamers in its portfolio—one of which made headlines today with a new growth announcement.

  • Houston-based Easton Energy says it will expand its NGLs and olefins storage at the underground salt dome caverns in Markham, Texas. The company holds exclusive rights to develop and lease certain caverns that will support a slate of fractionators and petrochemical plants coming online this year and beyond. Easton also looks to add crude storage at the site, where it has rights to 13 caverns and 50 MMBbls of storage. Easton in March 2019 acquired 415 miles of La., and Texas Gulf Coast NGLs pipelines from Williams for $177 million in cash.
  • Sentinel Midstream, through subsidiary Texas GulfLink, is developing a crude oil deepwater export terminal 32 miles off the Gulf Coast at Freeport with the capability to load VLCCs at a rate of 1.2 MMBPD. The Texas GulfLink project will include an onshore oil storage terminal connected by a 42” pipeline to a manned offshore platform. Sentinel is headquartered in Dallas.
  • Dallas-based Ocelot Energy Management offers end-to-end management services for liquid and natural gas pipelines, processing plants, terminals, and storage facilities. Turnkey services include operations and maintenance; engineering, permitting, construction management and technical support; and financing and accounting.
  • Blackbuck Resources designs and builds produced-liquids infrastructure between well sites and processing facilities. Based in Houston, Blackbuck operates across Texas, N.M., and Okla., offering gathering, disposal and treatment solutions, as well as pond management.
  • From The Woodlands, Texas, NAmerico Energy has numerous projects on its whiteboard. Although construction has been delayed until 2021, NAmerico’s first venture will be the 445.5-mile natural gas Pecos Trail Pipeline that will provide a direct link between the Permian and Gulf Coast demand centers. NAmerico also plans to build two laterals that will include the 40-mile Midland, which will extend from Sprayberry to Sheffield, Texas, and the 55-mile Orla in the Delaware that would connect to the Pecos Trail Pipeline at the Waha hub.
  • Dallas-based startup Cornerstone Midstream has partnered with a private producer in Andrews County, Texas, to build out a midstream system in the Midland sub-basin that will include natural gas gathering and processing as well as crude oil and water gathering.

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The Making of a La., LNG Hub

The Making of a La., LNG Hub

With three export terminal projects in the wheelhouse, Va.-based Venture Global LNG focuses its investments exclusively in the Bayou State with modular-designed, mid-scale liquefaction processing plants that are considered less risky and require less time to construct. The company’s proposed Plaquemines LNG Terminal, which will be located on the La., Gulf Coast, has now received federal approval to begin initial site work of the more than 600-acre location that will include 18 integrated single-mixed refrigerant blocks, four LNG storage tanks, three loading docks, and power generation facilities.

Venture Global LNG

Venture Global LNG is a long-term, low-cost producer of North American liquified natural gas (LNG). Our three export facilities, Calcasieu Pass, Plaquemines LNG and Delta LNG, will supply the world’s growing demand for low-cost, clean and reliable North American energy.

venturegloballng.com

Upon completion in 2023, the Plaquemines export terminal will produce 24 MTPA of LNG. The $8.5 billion project also includes construction of two pipelines that will interconnect with existing interstate pipelines to feed natural gas to the plant. Venture Global has signed long-term sale and purchase agreements with Polish Oil & Gas Company and Electricite de France. The company’s two other terminal projects include Calcasieu Pass in Cameron Parish, La., which will produce 10 MTPA of LNG, and the Delta LNG terminal located on a 540-acre site on the Mississippi River, south of New Orleans.

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Pipelines and Pipe Dreams

Pipelines and Pipe Dreams

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.

Mountain Valley Gets Its Groove Back

The beleaguered Mountain Valley Pipeline (MVP) has won FERC approval to lay a section of natural gas pipe under the Roanoke River in the southwest portion of Va. Construction has been halted since last Fall. The final leg of this project is expected to take 90 days, although plans are under discussion to extend the once-completed 303-mile pipeline south into N.C. The $5.5 billion MVP, which stands 90% complete, will flow 2 BCFD of natural gas sourced from the Marcellus and Utica basins to southern Va., and—pending additional legal challenges—is expected to go online by year end. Mountain Valley Pipeline is a joint venture of Equitrans Midstream, NextEra, Con Edison Transmission, WGL Midstream and RGC Midstream.

Investment Firm Glenfarne Snatches Up Magnolia LNG

Sweet Magnolia, you’ve changed hands so many times in such short order it’s hard to keep up. Just when you thought the Magnolia LNG export project in Brownsville, Texas, was well on its way to becoming a reality under the new ownership of La., landowner, investor and energy attorney Bill Blanchet, his Global Energy Megatrend (GEM), and Louisiana Natural Gas Exports—whoops! Not so fast, cowboy. The project has changed hands yet again.

N.Y.-based investment firm Glenfarne has now purchased Magnolia and its patented LNG processing technology for $2 million with every intention to bring the project to a final investment decision, break dirt and get on with the business of LNG processing and exports. Under Glenfarne, the Magnolia LNG export project will be rebranded Magnolia LNG Holdings. The firm’s Alder Midstream portfolio company holds a majority ownership of the also-proposed $3.5 billion Texas LNG Brownsville export terminal.

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