Opportunities to the Max

Opportunities to the Max

Houston-based Max Midstream has every intention to transform the Port of Calhoun into a major crude oil export center. With $1 billion worth of plans in motion, Max recently has acquired the Seahawk Pipeline and Terminal from private equity firm Oaktree Capital with a big, bold idea to offer shippers a more economical, less congested alternative to export sites at Houston/Galveston and Corpus Christi. The newly acquired pipeline connects the Kinder Morgan Crude and Condensate Interconnect in Edna, Texas, where Max also operates a crude oil terminal, to the Seahawk Terminal. Following construction of a new pipeline and added interconnects, Seahawk will flow up to 20 million barrels of Permian and Eagle Ford crude each month to a completely revitalized terminal system that includes its Edna site by 2023. Storage will increase to 9 million Bbls at Edna and 6 million Bbls at Seahawk. Max also is investing $360 million to widen and deepen the Port to accommodate Aframax and Suezmax ships. Phase 1 of the project is slated for completion in November.

Max Midstream

Max Midstream bridges the gap between upstream and downstream with strategic partnerships in the global refining sector. From the wellhead to Gulf, they deliver consistent quality crude oil quickly and efficiently, saving both time and money. Their high-capacity network of pipelines, storage and terminal facilities offer a seamless, one-stop solution for premium midstream operations.

maxmidstream.com

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Learn more about Reese Energy Consulting and our range of oil and gas midstream services at www.ReeseEnergyConsulting.com.

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Mission Accomplished for Energy Transfer

Mission Accomplished for Energy Transfer

Reese Energy Consulting today is following the latest news from Dallas-based Energy Transfer, which just announced completion of its on-budget, ahead-of-schedule Lone Star Express Pipeline Expansion. The new 352-mile line will flow NGLs from Winkler Co., Texas, and connect to the company’s 532-mile Lone Star Express bound for Energy Transfer’s monster Mont Belvieu storage and fractionation complex along the Gulf Coast. The expansion will add another 400 MBPD of capacity to the system’s existing 507 MBPD of mixed NGLs transported from processing plants in the Permian and Delaware. As part of the Lone Star project, Energy Transfer plans to construct an eighth fractionator at Mont Belvieu, which will increase total plant fractionation capacity to more than 1 MMBPD. Completion is expected next summer.

Energy Transfer

Energy Transfer Partners is a company engaged in natural gas and propane pipeline transport. It is organized in Delaware and headquartered in Dallas, Texas. It was founded in 1995 by Ray Davis and Kelcy Warren, who remains Chairman and CEO.

www.energytransfer.com

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Learn more about Reese Energy Consulting and our range of midstream services in the nation’s most prolific basins at www.ReeseEnergyConsulting.com.

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The Future’s Midstream Infrastructure Looks Decidedly Different by 2050. Or Does It?

The Future’s Midstream Infrastructure Looks Decidedly Different by 2050. Or Does It?

When Berkshire Hathaway in early July purchased 7,700 miles of natural gas pipelines owned by Va.-based Dominion Energy, the investment group handed the utility giant a new path forward to incorporate more renewable energy in its operations with a goal to generate 100% carbon-free electricity by 2045. The acquisition of Dominion’s pipe, which transports gas from the Marcellus and Utica basins, has added to Berkshire’s existing 16,000-mile pipeline network in a sure-fire bet that natural gas will be the primary bridge fuel for the next 50 years as coal takes its final bow.

The push to transform the fossil fuels industry is now a shove on steroids, no doubt accelerated by COVID-19.  As more regulators and the forces behind them halt new-build pipeline projects, and oil and gas majors reinvent themselves, midstream finds itself at a crossroads to get on board or get off the track. Shareholders and investors are demanding it. But what might the nation’s energy infrastructure look like in a future without crude oil, natural gas or NGLs coursing through its veins?

The majority of U.S. gathering, transportation and distribution pipelines is primarily used for fuels, which includes everything from onshore and offshore crude oil and natural gas, to water, hydrogen, coal slurry, biofuels, NGLs, and other fluids. For Smithfield Foods, the nation’s largest pork producer, sending renewable natural gas (RNG) flowing through pipelines has turned its industry upside down, and in a good way.

RNG comes from a variety of sources, including solid waste landfills, wastewater treatment plants, livestock farms, food production facilities, and organic waste management operations. It’s not a pleasant thought, but pigs produce more methane gas per pound of live weight than any other livestock. That’s a lot of greenhouse gases when you consider Smithfield manages millions of pigs every year. Smithfield in July partnered with Dominion to market that gas from the company’s capped lagoons that trap the methane. Dominion will siphon the methane from Smithfield’s anaerobic digesters and inject it into interstate pipelines to generate electricity. (You can read the tea leaves here.)

Tulsa-based Williams recently announced adding solar installations to power its natural gas assets, with sites under consideration in nine states. Will wind and solar farms soon become part of the midstream space? Whatever lies ahead, natural gas for the foreseeable future will enable the latest innovations that require electricity (a shout-out to Tesla), in addition to heating, cooking, vehicle fuels, manufacturing, industrial processes, and more. Transporting, processing and storing that gas will still require a midstream conduit. That is, until Elon Musk figures out how to SpaceX it right here at home.

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An Open Season, Potential Interest Buy in Cheniere, and the Ballad of the SPR Motel

An Open Season, Potential Interest Buy in Cheniere, and the Ballad of the SPR Motel

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.

Red Butte Pipeline Launches Open Season

Dallas-based Silver Creek Midstream has announced an open season for shipper commitments to make improvements on an eight-mile section of the company’s 495-mile Red Butte crude oil pipeline in Wyo. Deadline for bids is September 7. Red Butte is the largest transmission line to extend from the Big Horn and Wind River basins to Casper, Wyo. Upon completion of upgrades and refurbishments to the proposed section, the pipeline will offer 5,000 BPD of capacity. The Red Butte system includes two delivery points, multiple truck-loading stations, and more than 800,000 Bbls of storage.

PE Firms in Talks to Buy/Sell Large Interest in Cheniere

Private equity firm Blackstone began shopping its 41% interest in the nation’s largest LNG operator two months ago after investing $1.5 billion in Cheniere in 2012. Negotiations now appear to be on the table between Blackstone and alternative asset manager Brookfield for a stake in Cheniere valued at $7.8 billion. The company’s market value stands at about $18.9 billion. Amid demand destruction that has seen LNG exports nose-dive from a record-breaking 8.1 BCFD in January to 3.1 BCFD in July, and EIA projections of a serious recovery by the first of 2021, we’d love to see the calculus from each firm on this deal.

Producer Storage at the SPR Begins to Lighten

The nation’s Strategic Petroleum Reserve was never meant to be an extended-stay motel for producers’ crude oil supplies. Between the April oil glut and a near fever-pitch panic for storage wherever it could be found, the SPR offered up capacity in its underground salt caverns as a temporary sanctuary for U.S. oil whose price had free fallen into an abyss. While the Trump Administration advocated to purchase 77 MMBbls, Congress would have none of it. Instead, nine oil companies took advantage of the opportunity to store 23 MMBbls of oil in exchange for cheap rent and an eviction date of March 31, 2021. With the price of oil now rebounding, Exxon and the U.S. leg of Total this month have reclaimed 2.2 MMBbls of their crude. Take a load off, Fannie.

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