Thursday, March 29, 2012

Enbridge to spend $3.8 billion on pipeline to take oil sands crude to U.S. Gulf

HOUSTON & CALGARY, Alta. - Enbridge Inc. and Enterprise Products Partners L.P. on March 26 announced that they have secured capacity commitments from shippers to proceed with an expansion of the Seaway Pipeline that will more than double its capacity to 850,000 b/d by mid-2014.

During the supplemental binding open commitment period, Enterprise and Enbridge received additional commitments with terms ranging from five to 20 years that support construction of a 512-mile, 30-inch diameter twin (a parallel line) along the route of the Seaway Pipeline, adding 450,000 barrels per day (b/d) of capacity to the existing system. This capacity can be cost-effectively expanded on a timely basis with the addition of incremental pump stations.

The additional commitments obtained for the Seaway Pipeline System include five and 10-year commitments for volumes originating at Cushing, Okla., and 10, 15 and 20-year commitments for volumes originating at Flanagan, Ill., and transiting to the Seaway System via Enbridge’s Flanagan South Pipeline.

Substantially all of the initial capacity of the Seaway System has been contracted for these terms.

Enterprise and Enbridge are nearing completion of the first phase of the reversal of the Seaway Pipeline, which will provide 150,000 b/d of southbound takeaway capacity from Cushing to the Gulf Coast by June 1, 2012. Following pump station additions and modifications, which are expected to be completed by the first quarter 2013, capacity would increase to 400,000 b/d, assuming a mix of light and heavy grades of crude oil.

"Based on the tremendous response to the open commitment period, shippers have recognized the advantages Seaway offers in being able to provide a timely, economic and complete solution for relieving not only the bottleneck at Cushing but facilitating the development and delivery of North American energy reserves," said Michael A. Creel, president and chief executive officer of Enterprise's general partner. "In addition to promoting energy independence, the Seaway expansion will also offer economic benefits, including job opportunities during construction and at North American mills that we expect will provide the pipe for the project."

"Expansion of the Seaway Pipeline, along with Enbridge's Flanagan South Project, will provide crude oil producers in the Bakken region and other emerging crude oil sources capacity to move secure, reliable supply to U.S. Gulf Coast refineries, offsetting supplies of imported crude,” said Pat Daniel, CEO, Enbridge Inc. "By leveraging existing infrastructure wherever possible, impacts to landowners, communities and the environment will be minimized."

The Seaway partners previously announced construction of a new 85-mile 30-inch diameter pipeline that will be built from Enterprise's ECHO crude oil terminal southeast of Houston to the Port Arthur/Beaumont, Texas refining center, which will give shippers access to heavy oil refineries on the Gulf Coast. Service on the pipeline to Port Arthur/Beaumont is expected to begin in early 2014. A separate open season for the ECHO to Port Arthur leg is under way and due to end April 13, 2012. This open season is offering interested shippers 200,000 b/d of incremental capacity over and above the volumes already subscribed to as part of the Seaway reversal project.

Wednesday, March 28, 2012

Energy Transfer Equity, Southern Union announce completion of merger

Energy Transfer Equity, L.P. (NYSE: ETE) and Southern Union Co. (NYSE: SUG) on March 26 announced the successful completion of the previously announced merger of Southern Union with and into Sigma Acquisition Corp., a wholly owned subsidiary of ETE. Southern Union is the surviving entity in the merger and will continue to operate as a wholly-owned subsidiary of ETE.

Under the terms of the merger agreement, Southern Union stockholders were able to elect to exchange each outstanding share of Southern Union common stock for $44.25 of cash or 1.00x ETE common unit, with no more than 60 percent of the aggregate merger consideration payable in cash and no more than 50 percent of the merger consideration payable in ETE common units. Based on the final results of the merger consideration elections, holders of approximately 54 percent of outstanding Southern Union shares, or 67,985,929 shares, will receive cash, while holders of approximately 46 percent of outstanding Southern Union shares, or 56,981,860 shares, will receive ETE common units.

Effective with the closing of the market on March 26, Southern Union ceased to be a publicly traded company and its common stock stopped trading on the NYSE.

In connection with the closing of the merger of Southern Union and ETE, Energy Transfer Partners, L.P. (NYSE: ETP) announced that it has successfully completed the previously announced merger of a wholly owned ETP subsidiary with and into Southern Union subsidiary CrossCountry Energy, LLC, which owns an indirect 50 percent interest in Citrus Corp., the owner of the Florida Gas Transmission pipeline system. After the merger, CrossCountry Energy will remain as the surviving entity and will be a wholly owned subsidiary of ETP.

The total merger consideration is approximately $2.0 billion (comprised of $1.895 billion in cash and approximately 2.25 million ETP common units).

Tuesday, March 27, 2012

MarkWest announces producer agreement for East Texas processing expansion

MarkWest Energy Partners, L.P. (NYSE: MWE) on March 19 announced the execution of long-term gathering and processing agreements with Anadarko Petroleum Corp. (NYSE: APC) that will support the recently announced 120 million cubic feet per day (MMcf/d) expansion of the Partnership's cryogenic processing capacity in East Texas.

MarkWest will provide gathering and processing services to support Anadarko's liquids-rich development program within Panola County, Texas.

To provide critical midstream services to Anadarko and other producer customers that are expanding their drilling programs in East Texas, including Chevron, PetroQuest Energy, and Samson Lone Star, LLC, MarkWest is constructing the Carthage East plant, with cryogenic processing capacity of 120 MMcf/d, increasing total processing capacity in East Texas to 400 MMcf/d. In addition, Carthage East will expand the Partnership's gathering capacity in East Texas by 140 MMcf/d and residue gas outlet capacities by 60 MMcf/d.

Monday, March 26, 2012

CenterPoint Energy Gas Transmission files to establish Perryville Hub

HOUSTON, Texas - CenterPoint Energy Gas Transmission Co., LLC, an indirect, wholly-owned interstate natural gas pipeline subsidiary of CenterPoint Energy, Inc., announced on March 21 a filing with the Federal Energy Regulatory Commission (FERC) to amend certain provisions in its tariff to establish a Perryville Hub Trading Point within the existing Perryville Hub that can be accessed for primary or secondary receipt and/or delivery of natural gas using the company's firm and interruptible transportation and wheeling services.

The hub will have access to receive or deliver natural gas from the 21 interconnects CEGT has with interstate pipelines in the Perryville Hub. CEGT also proposes to establish the PTP as a site for trading or title transfers of natural gas between the company's shippers and/or non-shippers.

To accommodate trading needs, CEGT also has applied to list the hub as a trading point on the Intercontinental Commodity Exchange (ICE), allowing users to manage risks confidently and in real time. Reed added that with the addition of the ICE point, the hub will also provide new and existing customers, including the growing electric power and storage markets, a liquid point to buy and sell gas. In 2013, the PVH will directly connect with the high deliverability of the seven billion cubic feet Perryville Gas Storage project, further increasing liquidity and creating additional opportunities for CEGT and its affiliate, Mississippi River Transmission's, customers.

Friday, March 23, 2012

Energy Transfer announce results of Southern Union merger elections

Energy Transfer Equity (NYSE: ETE) and Southern Union Co. (NYSE: SUG) on March 20 announced preliminary results of the elections made by Southern Union stockholders regarding their preferences as to the form of merger consideration they will receive in connection with Southern Union’s pending merger with ETE, which is currently expected to be completed on or about March 26, 2012.

Under the terms of the Second Amended and Restated Agreement and Plan of Merger, dated July 19, 2011, as amended, among Southern Union, ETE and Sigma Acquisition Corp., a wholly-owned subsidiary of ETE, Southern Union stockholders could elect to exchange each outstanding share of Southern Union common stock for $44.25 of cash or 1.00x ETE common unit, with no more than 60 percent of the aggregate merger consideration payable in cash and no more than 50 percent of the aggregate merger consideration payable in ETE common units. Elections in excess of either the cash or common unit limits will be subject to proration.

Based on available information as of the election deadline on March 19, 2012, the preliminary merger consideration election results were as follows:

* Holders of approximately 55 percent of outstanding Southern Union shares, or 68,644,424 Southern Union shares, elected to receive cash. This includes 15,522,372 shares subject to guaranteed delivery procedures.

* Holders of approximately 45 percent of outstanding Southern Union shares, or 56,212,227 Southern Union shares, will receive ETE common units. This amount is comprised of 38,973,314 Southern Union shares for which holders elected to receive ETE common units (which includes 4,350,144 shares subject to guaranteed delivery procedures), and 17,238,913 Southern Union shares for which holders either did not make an election or did not deliver a valid election form prior to the election deadline and, therefore, will be deemed to have elected to receive ETE common units.

Elections made pursuant to the notice of guaranteed delivery procedure require the delivery of Southern Union shares to Computershare Trust Company, N.A., the exchange agent for the merger, by March 22, 2012. If the exchange agent does not receive the required stock certificates or book-entry transfer of shares by the guaranteed delivery deadline, the Southern Union shares subject to such elections will be treated as shares deemed to have made an election for ETE common units.

After the final results of the merger consideration election process are determined, the final allocation of the merger consideration will be calculated in accordance with the terms of the Merger Agreement.