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:  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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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.

energyspectrum.com

 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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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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The Midship Sees Light at the End of the Pipeline

The Midship Sees Light at the End of the Pipeline

The Midship Pipeline has been a long-suffering test of wills for Houston-based Cheniere Energy now awaiting FERC approval to begin initial service. Cheniere ranks as the second largest LNG operator in the world and natural gas is its lifeblood. The 200-mile natural gas Midship, which extends from Okla.’s Anadarko Basin to Gulf-bound interconnects, hit serious roadblocks during the course of construction with delays that included last year’s monumental rains and flooding, unexpected third-party changes, and a FERC stop-work order. The original in-service date of October 2019 was pushed six months out as cost-overruns mounted and producers with firm shipping commitments could only sigh.

But never say die.

Commissioning of the 1.4 BCFD Midship pipeline system, which includes three mainline compressor stations, seven receipt meter stations/taps, four delivery meters, and two laterals, began in February with an eye on mid-April to begin flowing about 925 MMCFD. Purpose-built to augment feedstock supplies for Cheniere’s Sabine Pass and Corpus Christi LNG terminals, the Midship also will provide a welcomed flow channel for SCOOP and STACK producers that include Devon, Marathon, and Gulfport Energy.

Pending approval from The Man, Cheniere expects to offer partial commercial service by April 17.

The Sabine Pass liquefaction terminal includes five trains with a sixth underway. When completed in 2023, Sabine Pass will have 30 mtpa of LNG capacity. The company’s Corpus Christi LNG facility operates two trains with a third under construction and will produce more than 10 mtpa. Cheniere also has proposed a midscale expansion at its Corpus site that would accommodate seven trains for a total of 10 mtpa of LNG.

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