Targa Announces Open Season; Excelerate Expands LNG Fleet

Targa Announces Open Season; Excelerate Expands LNG Fleet

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.

Targa Launches Open Season on Proposed NGL Interconnection

With more than 2,000 miles of NGLs pipelines, Houston-based Targa Resources now has its eye on building a new interconnection to link upstream pipeline facilities in the Anadarko Basin at Kingfisher, Okla., to the company’s fractionation facilities at the Mont Belvieu, Texas, NGL hub.

Targa has announced an open season from July 1-31 to gauge shipper interest on a proposed interconnection in Kingfisher where, following construction of a new 110-mile extension of the company’s Grand Prix NGL pipeline, will connect supplies to Williams’ Bluestem Pipeline. The Bluestem originates from Williams’ fractionator in Conway, Kan., and the terminus of Overland Pass Pipeline to Targa’s Grand Prix. Commercial service on the 188-mile Bluestem and the Grand Prix extension is expected in 1Q 2021.

Excelerate Adds 10th LNG Tanker to FSRU Fleet

While the nation’s LNG industry has largely fixated on the development of multi-billion-dollar export terminals that takes years to construct, Excelerate Energy has taken a whole different direction. And by “whole different,” we mean a complete 180-degree turn that’s put this company on the global map.

 Headquartered in The Woodlands, Texas, Excelerate puts its money on imports, converting LNG to natural gas aboard its fleet of floating storage regasification units (FSRUs). From the offshore vessel, gas flows to shore by way of an underwater pipeline where it’s distributed to power plants and homes. Excelerate owns import LNG terminals from Boston to Bangladesh and has secured the title of operating the largest fleet of FSRUs in the world, in addition to pioneering ship-to-ship transfer of LNG. Excelerate now has added a 10th FSRU to its fleet—the Excelerate Sequoia—which can store 173,400 cubic meters of LNG and act as an offshore import terminal to deliver natural gas to communities and nations near and far.

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Tumbleweed Midstream and the Helium Factor

Tumbleweed Midstream and the Helium Factor

Among our vast natural resources, the U.S. produces 75% of the world’s helium found in raw natural gas. But this valuable byproduct isn’t intrinsic in every gas deposit across the nation—as a matter of fact, it’s considered rare. Most helium-rich gas is located in Texas, Okla., Wyo., and the Kan.-Colo., border where it is cryogenically processed and liquefied for commercial use in everything from respiratory treatments, MRI magnets, fiber optic cables, semi-conductor chips, computer hard drives, microscopes, air bags and welding to—yes, helium-filled balloons. And the world is experiencing a shortage.

Tumbleweed Midstream

Tumbleweed Midstream, LLC is a privately held company focused on extracting helium from natural gas at the Ladder Creek Helium Plant in Cheyenne Wells, Colorado. 

www.tumbleweedmidstream.com

But just west of Cheyenne Wells, Colo., near the Colo.-Kan., border, the Ladder Creek helium plant and gathering system has just become busier than a one-legged man in a butt-kicking contest. Tumbleweed Midstream’s Ladder Creek cryogenic processing facility now has quadrupled its production with three new contracts that will increase the plant’s daily helium output to more than 200 MCFD and 65 MMCF per year.

Tumbleweed also has announced signing new processing agreements with suppliers who will truck unpurified helium to Ladder Creek—a process called helium tolling. The company says it purifies helium from long-distance producers from Ariz., to Canada.

Tumbleweed Midstream acquired Ladder Creek and its gathering system spanning more than 1,000 square miles from DCP Midstream in Dec. 2019. Producers in eastern Colo., and western Kan., earn premium netbacks for their helium-rich natural gas extracted and processed at Ladder Creek. Tumbleweed expects its facility to reach full capacity in the next 1-2 years and will consider expansions based on demand.

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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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Mach Resources Snags a Prize

Mach Resources Snags a Prize

In what has become a buyer’s market for well-capitalized E&Ps on the hunt for a bargain, Okla. City-based Mach Resources and its money-backer, Houston-based Bayou City Energy, have officially closed on an upstream/midstream acquisition that came perilously close to not happening at all.

Mach Resources

Mach is an independent oil and natural gas producer focused on acquiring, exploring and developing high-return, low-cost products. Founded in January 2017, the company pursues assets with production history and development opportunity. Mach is located in Oklahoma City.

machresources.com

Bayou City Energy

As a private equity firm founded in 2015, Bayou City Energy (BCE) focuses on making investments in the North American upstream oil and gas sector. BCE targets privately negotiated investments through two complementary strategies: providing buyout and growth equity capital for operated assets with current production and exploitable upside and partnering with operators to provide dedicated drilling capital in off-balance sheet structures. The BCE team, combined with the firm’s Advisory Board and strategic relationship with Argus Energy Managers, provides operators access to expertise, capital, and trusted partnership.

www.bayoucityenergy.com

In its third partnership since 2018, Mach and Bayou City formed BCE-Mach III, continued a strategy to scoop up distressed, underdeveloped, and undercapitalized assets in the Mid-Continent. Houston-based Alta Mesa, which sought bankruptcy protection last September, check-marked all the right boxes with 900 wells, 30 MBOED of production, and 72 MMBOE of proved reserves. Supporting those wells, the company’s Kingfisher Midstream subsidiary includes 453 miles of gas gathering pipeline, 157 MBWD produced water system capacity, 224 miles of water disposal pipeline, 108 miles of oil gathering pipeline, and 50 MBbls of oil storage capacity. BCE-Mach III announced in January it would purchase Alta Mesa’s assets for $320 million.

But like they say, everything can change in a heartbeat.

As commodity prices this year set off on a neck-snapping trip to free-fall land and the Coronavirus turned demand for oil and gas on its head, BCE-Mach III stumbled into a no-taker territory for the alternative financing needed to seal the deal. In March, Mach reluctantly announced it couldn’t obtain the funds for the purchase price agreed to.

Nevertheless, Mach CEO Tom Ward wasn’t about to let this first acquisition behind the “III” partnership slip through his fingers. The fit with Mach’s core areas in the Mississippi Lime and Western Anadarko Basin was ideal; the opportunity one for the taking that rode in lockstep with the company’s core business strategy. So, less than a couple of weeks ago, BCE-Mach returned to the bankruptcy table with a new offer. According to court documents, the sale of Alta Mesa’s assets was consummated for $159 million, almost half the original price of the first. For Ward, a combination of speed, agility and precision along with patience in a time of uncertainty will reap the big rewards as the market corrects itself. Such are the days.

What do you think?

RELATED STORY: The Operators: Salt Creek Midstream

 

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Black Bear Discovers a Honey Pot

Black Bear Discovers a Honey Pot

Consolidation in the midstream space continues this week with the latest news from Houston-based Black Bear Transmission, which will acquire Ozark Gas Transmission (OGT) and Ozark Gas Gathering (OGG) from a subsidiary of Canada-based Enbridge. If you’re keeping count, that’s four name drops in one sentence but hang with us as we peel back the layers.

Basalt Infrastructure Partners

Basalt I and Basalt II are two of the flagship Basalt Infrastructure Partner funds. They are infrastructure equity investment funds focusing on investments in utilities, power, transport, and communications infrastructure in North America and Europe. Other investments by the Basalt funds in North America include the Upper Peninsula Power Company, Texas Microgrid, DB Energy Partners, Detroit Thermal, Hyperion and Helios Power.

www.basaltinfra.com

Enbridge Energy

Enbridge Inc. is a Canadian multinational energy transportation company based in Calgary, Alberta. It focuses on the transportation, distribution and generation of energy, primarily in North America.

www.enbridge.com

Last December, N.Y.-based private equity firm Basalt Infrastructure Partners acquired Third Coast Midstream’s natural gas transmission business, which included seven natural gas pipelines stretching 550 miles with connections to eight major long-haul pipelines across La., Ala., Miss., Tenn., and Ark. Basalt rebranded its newest portfolio company Black Bear, and set off to explore opportunities to expand both the midstreamer’s asset base and utility and industrial customers in the Southeast.

With the close of its acquisition of OGT and OGG, Black Bear has found what amounts to a honey of an opportunity. OGT’s assets include a 367-mile interstate gas transportation system that extends from southeastern Okla., through Ark., and into southeastern Mo. OGG is a 330-mile gathering system, which sources gas from the Fayetteville Shale and Arkoma Basin that feeds into the OGT line. OGT also offers multiple connections that include Enbridge’s Texas Eastern Transmission System, Centerpoint’s Mississippi River Transmission, Boardwalk’s Texas Gas pipeline, and Kinder-Morgan’s NGPL.

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