More Midstream Alignment in the Haynesville

More Midstream Alignment in the Haynesville

Now in its third iteration as a Tailwater Capital portfolio company, Dallas-based Align Midstream continues to place its bets squarely on natural gas and the Haynesville. Align now has announced the completion of its 36-mile TOPS gas gathering line in the East Texas Carthage area that offers pipeline connections to downstream markets. The company reports TOPs will bolster its already active presence in the Haynesville. In addition, Align has formed a joint venture with Houston-based Sabine Oil & Gas to further develop TOPs. Sabine is a subsidiary of Japan’s Osaka Gas USA and marks that company’s inaugural U.S. midstream acquisition.

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.

Returning to Align’s active presence in the Haynesville, let’s take a look at where they’ve been and where they currently are.

Tailwater Capital in 2017 sold Align Midstream Partners I to Okla. City-based Enable for $300 million. That transaction included a 100 MMCFD cryogenic processing plant and 190 miles of natural gas gathering pipelines in East Texas and La.

Back for more, Align Midstream Partners II in 2018 constructed a gas gathering treatment and pipeline facility in the Haynesville to serve BP’s largest onshore drilling program. BP purchased its oil and gas assets there from BHP the same year.

As Align III, the company recently has added to its midstream infrastructure with the completion of an expandable 400 GPM amine system and a capacity of more than 200 MMSCFD of residue takeaway via NGPL and Gulf South pipelines.

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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.

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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Golden Pass LNG to Anchor Enable’s Proposed Gulf Run Pipeline

Golden Pass LNG to Anchor Enable’s Proposed Gulf Run Pipeline

Like they say, you have to crack some eggs to make an omelet. For Okla. City-based Enable Midstream, that means starting with modifications along the company’s 172-mile Line CP natural gas pipeline that extends from Carthage, Texas, to Delhi, La., before breaking ground on its proposed Gulf Run Pipeline project. Enable plans to upgrade three of four compressor stations and other facilities along its Line CP, which currently transports gas from west to east, and will “enable” bi-directional flow on a portion of the pipeline, with delivery to the proposed Gulf Run.

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

Enable’s 135-mile Gulf Run Pipeline project—a $1.3 billion endeavor that includes the upgrades to Line CP—will flow Haynesville natural gas from the company’s Westdale compressor station in Red River Parish, La,, to a connection with the Golden Pass Pipeline near Starks, La., and ultimate delivery to the Golden Pass LNG export terminal currently under construction. The $10 billion Golden Pass LNG facility, a joint venture between ExxonMobil and Qatar Petroleum, has recently requested permission to boost its capacity from 15.6 mtpa to 18.1 mtpa. The first of three trains at the terminal is expected to begin liquefaction in 2024.

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The Money Backers:  Energy Spectrum Capital

The Money Backers: Energy Spectrum Capital

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.

Private equity may have shut the door on investment capital for certain segments of the oil and gas industry, but Dallas-based Energy Spectrum Capital is leaving their door wide open for new midstream opportunities. This investor—the longest-operating midstream PE group in the nation—finds its niche with lower, middle-market companies that acquire, develop, and operate North American midstream assets. ESC has just announced the final close of its eighth midstream private-equity fund amounting to $996 million, and by all accounts looks to shop for more assets with an eye on gathering and transportation systems, processing and treating plants and storage facilities. Since its inception in 1995, the firm has raised more than $4.5 billion in capital for 63 portfolio companies. The previous Energy Spectrum Partners VII fund closed in 2014 at $1.225 billion.

Energy Spectrum Capital

Energy Spectrum Capital is a private equity infrastructure firm that focuses on the energy industry. The firm also manages private equity funds that make direct investments in the companies that acquire, develop and operate midstream energy assets.

 For now, ESC’s investments are spread across 15 midstream operators. But with nearly one $1 billion in pocket—and a ripe-for-the-picking environment—expect that number to increase in short order. Here are a few of the growth vehicles currently supported by Energy Spectrum.

  • Houston-based Azure Midstream operates 479 miles of natural gas pipeline, providing gas gathering, compression, treating and processing in north La., and East Texas. The company’s Holly System serves the “core of the core” of the Haynesville and consists of 361 miles of high- and low-pressure pipeline, two amine treating plants and four compressors. The Shelby System, which also services the Haynesville and Bossier formations, includes 126 miles of pipe, one amine treating plant, and access to four major pipeline interconnects.
  • From its home base in Plano, Texas, BlueJack Energy Solutions develops and operates wastewater solutions for Permian producers. Customers include Laredo Petroleum, Occidental, Sable Permian Resources, Arch Oil & Gas, and Discovery Natural Resources.
  • With 61 bulk liquids tanks and barge, rail and truck capabilities, Houston-based Bluewing Midstream is expanding its storage facilities to add 1.9 MMBbls of new storage capacity, as well as adding shipping connections at the Port of Brownsville.
  • Caliche also focuses on storage but on the subsurface side. Headquartered in Houston, this company owns and operates a 5 MMBbl salt cavern on the Texas Gulf Coast that can accommodate 600 lbs of ethylene at maximum capacity. Growth projects ahead include a large expansion to provide 32 MMBls of salt dome storage capacity.
  • In a joint venture with Concho Resources, Tulsa-based Frontier Energy Services built and sold the 500-mile Alpha Crude Connector in the Northern Delaware in 2017 to Plains All American for $1.215 billion. Frontier’s latest project, the Beta Crude Connector, will consist of 100 miles of crude oil pipe and approximately 250,000 Bbls of operational storage in the Midland.
  • City-based Great Salt Plains Midstream operates crude oil and natural gas infrastructure serving producers in the state’s STACK play. The company’s assets include 317 miles of crude pipe, 137 miles of natural gas pipe, two cryogenic plants, and the 115-mile Great Salt Plains Pipeline which extends from Cherokee to the Cushing Hub.

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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.

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.

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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