Pipelines Dangle New Carrots in Producer Deals

Pipelines Dangle New Carrots in Producer Deals

​Reviewing, evaluating, and negotiating contracts and agreements on behalf of producers and midstreamers has always been a big part of our business, but this year marks one the busiest as both parties adjust to the new-normal playing field. Shippers and midstream operators will always be codependent, with contracts and agreements between them to lock down the best rates and terms. When these are strategically negotiated, everyone wins. Producers get their supplies to the most lucrative markets and midstream operators earn their fees for processing and transporting those supplies. Then March happened and with it a confluence of fallout conditions that have resulted in pipelines offering fresh incentives for customers to stick with them. Sweeter terms, reduced rates upon contract renegotiation, and creative shipping options may be just the start. As negotiators, we know that preserving relationships is vital for both parties as they adapt and mutate in an uncertain environment for the benefit of each other. Interesting times for those of us on the bargaining end as the cards continue to shuffle.

What do you think?

Learn more about Reese Energy Consulting and our contract expertise at www.ReeseEnergyConsulting.com.

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Fall Harvest

Fall Harvest

Way to celebrate arrival of the autumnal equinox. Reese Energy Consulting today is following the latest achievements by Houston-based Harvest Midstream, which has just announced commissioning of two new connections between the company’s Ingleside Pipeline and two crude oil terminals operated by Moda Midstream. The first connection will provide access to Moda’s Ingleside Energy Center. The second, bi-directional connection will enable receipt and delivery of supplies from Moda’s Taft Terminal. The pipeline also transports volumes to the Flint Hills Terminal, so this makes three. Harvest completed the 24-mile, 600,000 BPD Ingleside Pipeline in June, which originates at the company’s soon-to-be-operational Midway Terminal now slated to rock and roll Oct. 1. Roughly 380,000 BPD of crude will be sourced from Harvest’s existing Eagle Ford gathering systems. As one of the nation’s largest privately held midstreamers, Harvest operates a sprawling network of crude and gas gathering systems, storage, processing and treatment plants, and terminal assets across the Lower 48 and Alaska.

Harvest Midstream

Harvest Midstream is an entrepreneurial, privately-held midstream service provider headquartered in Houston, Texas. Harvest Midstream safely and responsibly transports and processes oil, natural gas and natural gas liquids across the United States.

www.harvestmidstream.com

​What do you think?

Learn more about REC and our midstream services at www.ReeseEnergyConsulting.com.

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The Waiting Is the Hardest Part

The Waiting Is the Hardest Part

The permitting process is now complete for the ginormous, state-led, Alaska LNG Mega Project and North Slope Pipeline—and in record time at only three years. Upon completion, the 807-mile natural gas pipeline will flow supplies from Prudhoe Bay—which produces on average 3.5 BCFD of gas—to the proposed liquefaction and export terminal chillin’ southwest of Anchorage. The facility will be capable of exporting 20 MTPA. The state sponsor of the project—Alaska Gas Development Corp. (AGDC)—submitted its first estimate of $44.2 billion. But that quickly set hair on fire, and initial investors ExxonMobil, BP, and ConocoPhillips, citing depressed gas prices, folded in 2017. Then Alaska’s governor deemed the project too complex and risky for the state to develop on its own. AGDC subsequently announced it doesn’t plan to continue to own, or later operate, what is considered to be one of the largest, most costly LNG complexes in the world. The state sponsor returned to the table in June with a slashed budget of $38.7 billion, a new economics deck, and a search for partners to transition the project by January.

Alaska Gas Development Corporation

The Alaska Gasline Development Corporation (AGDC) is an independent, public corporation of the state of Alaska. AGDC’s roots date back to 2009, when declining Cook Inlet gas supplies raised the possibility of local energy brown outs and higher energy costs. In 2010, the Alaska Legislature passed House Bill 369, creating AGDC.

agdc.us

What do you think?

Learn more about Reese Energy Consulting at www.ReeseEnergyConsulting.com.

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Outrigger Out to Conquer The West

Outrigger Out to Conquer The West

Wasn’t quite four years ago Outrigger Energy said adios to its West Texas operations with the $1.5 billion sale of its Permian midstream assets to Targa Resources. But the company hardly looked to sever ties with The West. Denver-based Outrigger had already built a sizeable crude oil gathering system in the Powder River Basin. So, flush with cash and private equity capital, Outrigger said hello darlin’ to the DJ, where it constructed a midstream system in Weld Co., Colo., that includes natural gas, crude oil, and produced water gathering pipelines. The company also purchased a 60 MMCFD cryogenic processing plant that went into service last year. Next up, how’s it goin’ Williston? With a sweet midstream commitment from XTO, Outrigger announced in January plans to build a 70-mile rich gas gathering system and a 200 MMCFD processing facility. Even today, some pipe dreams come true. Outrigger now has received the official regulatory nod from N.D., to continue construction on the plant and two pipelines that will flow residue gas and NGLs from the plant to major pipeline interconnects.

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

What do you think?

Learn more about Reese Energy Consulting at www.ReeseEnergyConsulting.com.

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