The Midstream Range Rover

The Midstream Range Rover

You could say Sugar Land, Texas-based Rangeland Energy is somewhat of a train buff when it comes to building refined products hubs. Through its various iterations as a portfolio company of private equity firm EnCap Flatrock, this midstreamer has developed crude oil distribution systems that offer access to multi-modal transportation options to deliver crude oil, natural gas, NGLs, and other petroleum products to North American markets. And rail cars play a big part in this company’s business strategy.

Rangeland Energy

Rangeland Energy is a midstream company that meets the infrastructure requirements of refiners, commodities marketers, producers and retail distributors in resource plays and growing markets.

www.rangelandenergy.com

Rangeland first developed the Bakken’s N.D., COLT Hub in 2012, which offers connections to outbound pipeline systems and crude-by-rail service. That company sold months later to what is now known as Crestwood Energy Partners.

Develop, learn, operate, exit.

And Rangeland did.

Applying its newfound knowledge of rail service and listening to market demand, Rangeland in 2013 started up its RIO Hub in the Texas Delaware sub-basin, solidifying its midstream niche to provide pipeline connections and rail services at its terminals. But this time, Rangeland also expanded its capabilities to include inbound frack sand storage and loading outbound truck services.

Two years later, Rangeland Energy with the support of its financial backer, fired up a second, simultaneous venture to develop the South Texas Energy Products System (STEPS), which began operations in 2018. The system receives and stores refined products, LPG, and other hydrocarbons at a Corpus Christi terminal and transports supplies to terminals in Mexico. The Corpus Christi terminal is strategically located along the Kansas City Southern Railroad mainline.

At the same time, Rangeland took a hard look at western Canada, where E&Ps operating in the huge Montney shale play of Alberta have battled a dearth of natural gas midstream assets to transport supplies to markets. The company created subsidiary Rangeland Canada to introduce its commercial model to an underserved area and has now announced service on its new 52-mile Marten Hills Pipeline System. The crude oil and condensate pipelines originate near Slave Lake, Alberta, and terminate at the Edmonton Hub and refining market, a major crude oil rail loading terminal.

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Precarious Times in the Midstream Bakken

Precarious Times in the Midstream Bakken

A recent one-two punch in the Rockies has left oil and gas producers and midstreamers reeling to predict an uncertain fallout from two back-to-back events in an already head-shaking year.

When Okla. City-based Chesapeake Energy officially filed for bankruptcy June 28th, a tsunami of Plan Bs—many already in place—flooded midstream operators that held contracts with producers to gather, process and flow crude oil, natural gas and NGLs from the Bakken, Powder River Basin, South Texas, and Appalachia.

Crestwood Energy

Crestwood Equity Partners LP (NYSE: CEQP) is a publicly traded master limited partnership that owns and operates midstream assets located primarily in the Bakken Shale, Delaware Basin, Powder River Basin, Marcellus Shale, Barnett Shale and Fayetteville Shale.

www.crestwoodlp.com

Now, one week later, the U.S. District Court in Wash., D.C. has handed down a decision to shut down and completely drain the 1,172-mile Dakota Access Pipeline (DAPL). DAPL is a major pipeline artery out of the Bakken, transporting 570,000 BPD of crude oil from N.D., to Ill., where it connects with Energy Transfer’s crude oil pipeline that extends to South Texas markets. Energy Transfer and its DAPL partners have 30 days from July 6 to comply with the ruling. Energy Transfer plans to appeal.

For at least one midstream operator, the untimely crush of events between Chesapeake’s bankruptcy and DAPL has resulted in a go-forward plan to assure its Bakken producer customers in these precarious times.

Houston-based Crestwood Equity Partners’ operations gobble up a chunk of the nation’s midstream map with crude oil, natural gas, and NGLs assets that include gathering and processing, storage, and transportation predominantly in the Bakken, Powder River and Marcellus. Chesapeake just happens to be a longtime Crestwood customer in the Bakken. And Crestwood’s Arrow gathering system there connects to the DAPL.

So, how does a midstream operator get ahead of two hard punches in a week?

You get in front of it. Exactly as Crestwood has. The company immediately issued an update to its shareholders ensuring it had prepared for the Chesapeake bankruptcy and remains well-positioned to maintain full operations throughout the bankruptcy proceedings to include gathering and processing natural gas with more than 320 Chesapeake wells connected to Crestwood’s Jackalope system.

In response to the DAPL situation, Crestwood has assured its customers that, no matter how the ball swings following court appeals, the company can ensure downstream market access via its Arrow system for 100% of its producer customers’ crude. The Arrow system connects to DAPL, Hiland and Tesoro pipelines. In addition, Crestwood can transport crude volumes to its COLT Hub Facility in N.D., by pipeline or truck. COLT is the leading crude oil terminal in the Bakken with multiple pipeline connections, storage capacity of 1.2 MMBbls, and rail loading capacity of 160 MBPD.

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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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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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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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