Energy Pipeline News

Four Bears Pipeline means fewer trucks, more oil moving to market

2012-01-30T17:20:00.000-08:00

WATFORD CITY, N.D. - Senator John Hoeven said that the Four Bears Pipeline is a key addition to the state’s oil transportation infrastructure. He joined state and local officials and industry leaders at an open house on Jan. 20 celebrating the 77-mile Four Bears Pipeline, which is designed to move up to 80,000 barrels of oil per day (b/d) through Dunn and McKenzie counties to existing pipeline infrastructure near Belfield.

"This Four Bears Pipeline is an efficient means of moving Bakken sweet crude from North Dakota to market, and transporting more Bakken oil is good for western North Dakota, our state and nation. We've worked hard to make it possible for important infrastructure like this to be constructed," Hoeven said.

The Four Bears Pipeline is expected to remove the need for more than 300 truck trips down Highway 85 and Highway 22, which translates into 30,000 miles per day off these congested corridors. It now delivers crude oil to the Butte pipeline at Baker, Mont., and the Bakken Oil Express rail terminal near Dickinson. In the future, Four Bears will deliver oil to the Belle Fourche pipeline and the proposed Keystone XL Pipeline, which, once constructed, will have the capacity to deliver 830,000 b/d, including 100,000 b/d from the Bakken region.

The Four Bears Pipeline is operated by Bridger Pipeline, LLC. Bridger and Belle Fourche pipelines are a part of the True companies of Casper, Wyo., operating more than 3,400 miles of pipeline systems in western North Dakota, eastern Montana and Wyoming.

Higher spending on lobbying failed to prevent delay of Keystone XL project

2012-01-30T14:42:00.000-08:00

WASHINGTON - TransCanada, the pipeline company pushing the recently rejected Keystone XL project, spent $410,000 on federal lobbying during the last three months of 2011, a new quarterly high for the company.

The total is $20,000 more than TransCanada spent in the previous quarter and nearly double the $220,000 it spent in the second quarter of 2011. Altogether, the company paid $1.33 million on lobbying in D.C. last year.

TransCanada was seeking State Department approval of the proposed 1,702-mile-long Keystone XL pipeline. The $7 billion project will connect Canadian tar sands deposits to Texas refineries.

Koch Bros. help fund attack on Obama's rejection of Keystone XL Pipeline

2012-01-27T14:29:00.000-08:00

Americans for Prosperity, the conservative group partly funded by the billionaire Koch brothers, on Jan. 18 slammed President Barack Obama for rejecting the Keystone XL oil pipeline.

"We will continue to support private industry and job growth, even as the President blocks efforts like the Keystone pipeline that would create good paying private sector jobs and help our economy recover," the group said.

"Unfortunately, President Obama's idea of job growth is increasing unemployment benefits, which does little other than keep unemployment high while causing our national debt to skyrocket."

Caballo Energy acquires Eagle Chief Midstream, LLC

2012-01-26T14:34:00.000-08:00

TULSA, Okla. - Caballo Energy, LLC announced on Jan. 18 that it has acquired Eagle Chief Midstream, LLC, which owns a natural gas gathering and processing system in northwestern Oklahoma.

The Eagle Chief assets are strategically located at the intersection of the liquids-rich Mississippi Lime and Cana Woodford Shale plays. Eagle Chief is connected to more than 370 wells and serves 25 producers.

The Eagle Chief system includes more than 600 miles of natural gas gathering pipelines, compression and processing assets located in Alfalfa, Blaine, Garfield, Major and Woods Counties.

In early 2013, the company will install a new cryogenic plant, bringing total natural gas processing capacity to approximately 100 million cubic feet per day (MMcf/d).

Caballo delivers processed gas to ONEOK Gas Transportation and Panhandle Eastern Pipe Line. Natural gas liquids are delivered to ONEOK NGL Pipeline. The Eagle Chief system also includes salt water disposal and crude oil gathering systems.

Caballo Energy is backed by private equity commitments from EnCap Flatrock Midstream of San Antonio.

"The Mississippi Lime and Cana Woodford Shale are two of the most exciting plays in the country," said Dennis Jaggi, one of EnCap Flatrock Midstream's three managing partners and a member of Caballo Energy's board of managers.

Spectra Energy secures two shippers for Texas Eastern expansion

2012-01-25T17:55:00.000-08:00

HOUSTON, Texas - Spectra Energy Corp.'s Texas Eastern Transmission, LP on Jan. 17 announced it has reached binding agreements with two anchor shippers for its TEAM 2014 project, an expansion of its existing Texas Eastern system to deliver additional emerging Appalachian shale natural gas supplies to diverse markets in the Northeast, Midwest and Southern U.S.

The commitments provide sufficient market support to proceed with the development of the TEAM 2014 project. Texas Eastern will solicit interest from additional shippers through a binding open season that began on Jan. 17 and will end Feb. 17.

TEAM 2014, with an estimated fourth quarter 2014 in-service date, reflects a fully scalable capacity expansion of up to 1.4 billion cubic feet per day, including the volume of the two anchor shippers. Because Texas Eastern is expanding its existing pipeline system, the expansion project can be sized to meet the needs of the two anchor shippers as well as additional shippers that may be identified during the binding open season.

The company currently estimates the expansion will result in a capital investment of approximately $500 million, which could potentially increase based on the results of the open season.

Interested shippers will have the opportunity to nominate transportation services from multiple existing and proposed receipt points in West Virginia and southwestern Pennsylvania to multiple delivery points across the Northeast, Midwest and Southeast U.S. markets.

Spectra Energy secures two shippers for Texas Eastern expansion

2012-01-24T15:00:00.000-08:00

The company currently estimates the expansion will result in a capital investment of approximately $500 million, which could potentially increase based on the results of the open season.

TransCanada attacks Cornell report on Keystone XL jobs

2012-01-23T16:30:00.000-08:00

TransCanada has criticized a study from the Cornell University Global Labor Institute stating that the company's Keystone XL project would only generate up to 4,650 temporary direct construction jobs for two years.

"Why groups like (the Natural Resources Defense Council) and Cornell continue to question job creation in the United States is a concern," said Terry Cunha, a spokesman for TransCanada. "We fully understand the jobs that are needed to build a piece of infrastructure of this size. We like to think of ourselves as the experts," Cunha added.

Boardwalk Pipeline unit offering priced at 3.4 percent discount

2012-01-20T14:22:00.000-08:00

NEW YORK - Boardwalk Pipeline Partners L.P. (NYSE: BWP) announced on Jan. 20 that a new public offering of eight million units would be priced at a 3.4 percent discount) to the unit’s Jan. 19 closing price.

Units were down 4.2 percent pre-market at $27.29, below the offered price of $27.55 and the Jan. 19 close of $28.51. The stock closed at $27.50, down $1.01 on the day.

The oil-and-gas transporter has expanded its pipeline network in the shale-gas regions of the Southeast as its transportation volumes grow.

Loews Corp., a conglomerate led by New York's Tisch family, holds a roughly 20 percent stake in Boardwalk.

Boardwalk Pipeline said it expects to raise about $217.5 million. The partnership may use some or all of the proceeds for other general partnership purposes, which may include acquiring additional equity interests in Boardwalk HP Storage Company, LLC, a joint venture between the partnership and Boardwalk Pipelines Holding Corp., an affiliate of the partnership's general partner.

The partnership has granted underwriters a 30-day option to purchase up to an additional 1,200,000 common units.

Obama rejects Keystone XL line from Canada, triggering controversy

2012-01-19T14:08:00.000-08:00

WASHINGTON - The Obama administration on Jan. 18 denied a permit for the Keystone XL oil pipeline from Canada, touching off a torrent of criticism from Republicans, whom the White House blamed for forcing a decision.

President Barack Obama, who was under a 60-day deadline imposed by congressional Republicans, left open the door to approve the 1,661-mile pipeline in the future. He also suggested the possibility of an alternative pipeline that could get Canadian oil sands crude to refineries and ports in Texas.

The company that wants to build Keystone XL, TransCanada Corp., said on Jan. 18 that it would apply for a new permit which, if approved, would allow the pipeline to be built by late 2014.

Environmentalists had made the project a test case on whether the administration was serious about fighting climate change. And though Obama didn't rule out future pipelines, they declared victory.

Business groups, congressional Republicans and the GOP's presidential candidates hammered Obama for rejecting the project, which they said would create jobs.

In a statement, Obama said he was siding with his State Department and denying the permit because of a "rushed and arbitrary deadline" that congressional Republicans attached to a payroll tax-cut extension in December.

"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people," Obama said.

Obama said his administration would "continue to look for new ways to partner with the oil and gas industry to increase our energy security," and he said that would include a potential pipeline from Cushing, Okla., to the Texas Coast. An existing Keystone pipeline from the oil sands ends at Cushing. Extending it could be an alternative way of getting the oil sands crude to the Gulf Coast.

The administration's decision was a delay, but not necessarily the end of the line, when it comes to linking Canada's oil sands with Texas. The State Department last summer said it found no major environmental problems with the pipeline, but later it changed course because of concerns about the pipeline's route through Nebraska's sensitive Sand Hills region and asked for a review of alternative routes.

TransCanada president Russ Girling said the company would reapply for a permit and "largely maintain the construction schedule of the project." He said a route would be found by October to avoid the Sand Hills.

But he charged that "until this pipeline is constructed," the U.S. will continue to import oil from "foreign countries who do not share democratic values Canadians and Americans are privileged to have. Thousands of jobs continue to hang in the balance if this project does not go forward."

White House Press Secretary Jay Carney, who spoke before the administration announced its decision, blamed Republicans for launching a "purely partisan effort to score a political point." He said the State Department had warned that forcing a decision within 60 days "would make it virtually impossible for an adequate review."

He said the concerns under review included environmental effects on air and water quality in Nebraska and a request by Nebraska's governor to consider an alternate route.

"We don't even have an alternate route identified yet, so how could anyone possibly review it thoroughly in the manner that is expected in this process?" he said.

Carney insisted Obama doesn't necessarily oppose the construction of pipelines.

"This president's commitment to expanding domestic oil and gas production is firm," he said.

Environmental groups opposed the Keystone XL pipeline chiefly because of climate change, but also because of the risk of oil spills. Canada's oil sands require more energy to extract and refine the crude, and that means a greater release of greenhouse gases than from refining conventional oil. They also argued that oil sands crude wouldn't improve energy security because it could be exported from Texas ports.

President Barack Obama's rejection of TransCanada's Keystone XL pipeline demonstrates a "clear lack of leadership" and that politics played a role in the ruling, said Jack Gerard, president and CEO of the American Petroleum Institute. Gerard said that API would pursue all legal and legislative options to get the pipeline constructed. "These are serious national decisions that shouldn't be made on political whims. The president has fallen victim to a small group that is anti-oil and gas," he added.

President Barack Obama should overturn his decision to reject TransCanada's Keystone XL pipeline, several House Republicans said, arguing that otherwise job generation and the country's push for energy independence would be affected. "It's not too often that the president of the United States has the opportunity, with one swipe of his pen, to increase private sector jobs by thousands of employees, while at the same time increasing our energy independency and energy security," said Rep. Ben Quayle, R-Ariz. "This is the wrong decision at the wrong time," he added.

Republicans are studying alternative ways to get TransCanada's Keystone XL pipeline built after the Obama administration decided to reject the project. "This is not the end of the fight. Republicans in Congress will continue to push this because it is good for our country, it is good for the economy and it's good for the American people," said House Speaker John Boehner, R-Ohio.

The House Energy and Commerce Committee will hold a hearing next week on President Barack Obama's rejection of TransCanada's Keystone XL pipeline, and committee Chairman Fred Upton, R-Mich., has invited Secretary of State Hillary Clinton to testify. The State Department was in charge of the review of the project.

Republicans pushed President Barack Obama to reject TransCanada's Keystone XL pipeline when they shortened the decision-making schedule for the project, said House Minority Leader Nancy Pelosi, D-Calif. "If the Republicans care so much about the Keystone pipeline, they would not have narrowed the president's options by putting it on the time frame that they did," Pelosi said. "They left him very little choice."

Hoover Energy Partners buys Permian Basin assets, building crude oil pipeline

2012-01-18T14:52:00.000-08:00

HOUSTON, Texas - Hoover Energy Partners LP announced on Jan. 12 that it has acquired a 50-mile natural gas gathering system, water transportation system and water disposal well located in Reeves County, Texas, from Eagle Oil & Gas.

The Eagle system is underpinned by a long-term dedication of approximately 68,000 gross acres that Comstock Resources, Inc. (NYSE: CRK) recently acquired from Eagle Oil & Gas.

Additionally, Hoover announced it has begun construction on Phase I of the Pecos Crossing Pipeline, a 24-mile, 12-inch crude oil system that will serve Ward and Reeves counties, Texas, and will have a capacity of up to 120,000 b/d. Both assets are located in the heart of the Bone Spring and Wolfcamp plays of the Delaware Basin.

"Hoover Energy Partners has shifted into high gear with the Eagle acquisition and construction of Pecos Crossing," said Randy Hoover, president of Hoover Energy Partners. "We see 2012 as the year that Hoover will emerge as the premier midstream company serving producers targeting the Wolfbone play in Reeves and Pecos counties. Additional growth projects will be announced in the coming months."

Pecos Crossing Pipeline is scheduled to be operational in April 2012 and will be the first crude oil pipeline operating south of the Pecos River. At its northern terminus, Pecos Crossing will deliver to Plains All American Pipeline's newly constructed Barstow Station. At the southern terminus, Hoover will serve the Perry Ranch Station, a newly constructed truck loading and tank terminal.

Multiple producer- and Hoover-owned laterals will continue to be constructed and connected as the Wolfbone is developed. Phase II of Pecos Crossing is being contemplated as the Wolfbone play extends south into Pecos County, Texas, where Hoover's legacy 550-mile natural gas gathering system and treating facilities are located.

Significant change in market needed to save Alaska natural gas pipeline

2012-01-17T18:03:00.000-08:00

WASHINGTON - The U.S. natural gas market is going to have to change dramatically for pipeline developers to salvage their plan to ship gas from Alaska to the Lower-48 states, a key federal official said on Jan. 10 at the Platts Energy Podium.

"It is going to take a big turnaround in the market, no doubt about it," Larry Persily, federal coordinator of Alaska Natural Gas Transportation Projects, said at the event in Washington, D.C.

TransCanada and ExxonMobil have been working with state and federal officials on plans to build a $40 billion, 48-inch-diameter pipeline from the North Slope to the Canadian border, where Canadian pipelines would carry gas to the Lower-48.

However, shale gas development has dampened U.S. demand for the gas, and North Slope producers BP, ConocoPhillips and ExxonMobil met with Alaska Governor Sean Parnell before the conference to discuss alternatives to the project, including a pipeline to a new liquefied natural gas (LNG) export project.

After the meeting, BP CEO Bob Dudley and ConocoPhillips CEO Jim Mulva said the LNG project seemed to be a better way to get the gas to market, casting growing doubts on the viability of the pipeline.

Persily acknowledged that the pipeline's future hinges on the producers. "It is going to take concurrence of the three producers. They are the ones that control the vast majority of the leased acreage, the production coming out of there. They are the ones that are going to have to sign 20-year firm shipping commitments on the pipeline worth more than $100 billion."

Persily said he thought the project had a 50-50 chance of being constructed by 2020. "I haven't given up on the project. ... What it would take is the companies believing the market is there at a sufficient price."

He also noted that there are key benefits to building the pipeline instead of the LNG project. The Alaska Natural Gas Pipeline Act provides federal loan guarantees for the pipeline, and $21 billion worth of guarantees are currently authorized, he said. The law also allows for accelerated depreciation for the pipeline and an enhanced oil recovery investment tax credit for the gas treatment plant, which together are worth more than $1 billion in tax savings, he added.

Enterprise extends open season for capacity on ATEX Express pipeline

2012-01-13T12:56:00.000-08:00

HOUSTON, Texas - Enterprise Products Partners L.P. (NYSE: EPD) announced on Jan. 10 that it is conducting a two-week supplemental open commitment period to accommodate additional shipper demand on the partnership's Appalachia to Texas pipeline ("ATEX Express").

Earlier in January, Enterprise said that it had received sufficient long-term transportation commitments to move forward with development of the 1,230-mile ATEX Express pipeline, which will deliver growing ethane production from the Marcellus/Utica Shale areas of Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast.

"Since our announcement to proceed with development of the ATEX Express pipeline, we have received multiple inquires from producers seeking transportation capacity," said A.J. "Jim" Teague, executive vice president and chief operating officer of Enterprise's general partner. "We will use this extended open commitment period to execute additional binding, 15-year transportation agreements."

The open commitment period ends Jan. 23.

ShawCor wins concrete coating contract for Technip Latin American Project

2012-01-12T14:54:00.000-08:00

TORONTO - ShawCor Ltd. on Jan. 9 announced its pipe coating division, Bredero Shaw, has received a significant contract from Technip USA to provide concrete weight coatings, anode installation and other related services for a Latin American pipeline project.

The project will consist of approximately 100 km. of 36-inch pipe to be installed offshore for the transportation of natural gas. Bredero Shaw will mobilize two compression coat technology (CCT) concrete weight coating plants to La Brea, Trinidad, for the project. Initial operations are scheduled to begin during the first quarter of 2012 with concrete coating scheduled to start in the third quarter of 2012.

Enterprise, Genesis Energy to build crude oil system in deepwater Gulf of Mexico

2012-01-11T15:02:00.000-08:00

HOUSTON, Texas - Enterprise Products Partners L.P. (NYSE: EPD) and Genesis Energy, L.P. (NYSE: GEL) on Jan. 4 announced that they have executed crude oil transportation agreements with a consortium of six Gulf of Mexico producers which will provide the necessary support for construction of a new crude oil gathering pipeline serving the Lucius development area in southern Keathley Canyon.

The producer group is comprised of Anadarko U.S. Offshore Corp., Apache Deepwater Development LLC, Exxon Mobil Corp., Eni Petroleum US LLC, Petrobras America Inc. and Plains Offshore Operations Inc.

The pipeline will be constructed and owned by Southeast Keathley Canyon Pipeline Co. LLC (SEKCO), a 50/50 joint venture between Enterprise and Genesis. Enterprise will serve as construction manager and operator of the new pipeline, earning fees for both services.

The 149-mile, 18-inch SEKCO Oil Pipeline is being designed with a capacity of 115,000 barrels per day b/d) and would connect the Lucius-truss spar floating production platform to an existing junction platform at South Marsh Island 205 that is part of the Enterprise-operated Poseidon pipeline system.

The SEKCO Oil Pipeline is expected to begin service by mid-2014. Located in approximately 7,100 feet of water, the third-party owned Lucius-truss spar floating production platform has the capability to produce in excess of 80,000 b/d of crude oil and 450 million cubic feet per day of natural gas. The Lucius production area is estimated to have more than 300 million barrels of oil equivalent, with relatively shallow and highly productive reservoirs, primarily comprised of crude oil.

"We are very pleased to work with our partner and customers to develop this project, which will allow for the continued safe and reliable delivery of vital domestic crude oil supplies to Gulf Coast refineries," said Michael A. Creel, president and CEO of Enterprise's general partner.

"Additionally, we expect the SEKCO Oil Pipeline to provide capacity for additional projects in the deepwater Gulf of Mexico that will feed Enterprise's downstream crude oil pipeline value chain."

Kinder Morgan Partners buys TransMontaigne Partners' interest in BOSTCO

2012-01-10T14:45:00.000-08:00

HOUSTON, Texas - Kinder Morgan Energy Partners, L.P. (NYSE: KMP) on Jan. 4 announced the purchase of TransMontaigne Partners L.P.'s 50 percent interest in the previously announced Battleground Oil Specialty Terminal Co., LLC (BOSTCO) project.

KMP now owns 98 percent of BOSTCO and began construction on Dec. 14 of a new, approximately $430 million oil terminal located on the Houston Ship Channel.

The remaining two percent will be held by a customer at the BOSTCO facility.

The first phase of the project currently includes construction of 52 storage tanks that will have a capacity of 6.6 million barrels for handling residual fuel, feedstocks, distillates and other black oils. Terminal service agreements and/or letters of intent have been executed with customers for almost all of the capacity.

"The project will include one of the deepest vessel drafts in the Houston Ship Channel and position Kinder Morgan extremely well for the growing trend of exporting petroleum related products overseas," said Kinder Morgan Terminals President Jeff Armstrong.

BOSTCO is expected to be accretive to cash distributable to KMP unitholders when the first phase of the project comes online in the third quarter of 2013. The first phase of the project is expected to be completed by the first quarter of 2014.

TransMontaigne Partners L.P. (NYSE: TLP) received cash consideration equal to its investment plus a transferrable option to buy 50 percent of Kinder Morgan's interest at any time prior to Jan. 20, 2013.

The project will include one of the deepest vessel drafts in the Houston Ship Channel and be well positioned to participate in the growing trend of exporting petroleum-related products overseas.

Chesapeake Partners buying Marcellus assets from Chesapeake Energy

2012-01-09T16:23:00.000-08:00

OKLAHOMA CITY, Okla. - Chesapeake Midstream Partners, L.P. (NYSE: CHKM) on Dec. 28 announced it has agreed to acquire Appalachia Midstream Services, L.L.C. (NYSE: AMS), the wholly owned subsidiary of Chesapeake Midstream Development, L.P. that holds its Marcellus Shale midstream assets, for total consideration of $865 million.

Chesapeake Midstream Development, L.P. is a wholly owned subsidiary of Chesapeake Energy Corp. (NYSE: CHK).

The addition of the Marcellus assets makes CHKM the industry's largest gathering and processing master limited partnership as measured by throughput volume.

Through acquiring AMS, CHKM will own approximately 47 percent of an integrated system of assets that consist of approximately 200 miles of gathering pipeline in the Marcellus Shale, including the liquids-rich Marcellus South region. Throughput for these assets at Dec. 15, 2011, was just over one billion cubic feet per day. AMS operates the assets under 15-year fixed fee gathering agreements with leading Marcellus natural gas and liquids producers.

The gathering agreements include significant acreage dedications and annual fee redeterminations that target a mid-teens return on all invested capital in the acquired assets.

Chesapeake has committed to generating EBITDA of not less than $100 million in 2012 and $150 million in 2013 from the Marcellus assets for the benefit of CHKM.

The acquisition, which closed on Dec. 30, 2011, was financed by $600 million of cash drawn from CHKM's revolving credit facility and equity consideration of $265 million (9.8 million CHKM common units), increasing Chesapeake's limited partnership ownership of CHKM to 46.1 percent from 42.3 percent.

Kinder Morgan Partners buys TransMontaigne Partners’ interest in BOSTCO

2012-01-06T15:05:00.000-08:00

KMP now owns 98 percent of BOSTCO and began construction on Dec. 14 of a new, approximately $430 million oil terminal located on the Houston Ship Channel.

The remaining two percent will be held by a customer at the BOSTCO facility.

The project will include one of the deepest vessel drafts in the Houston Ship Channel and be well positioned to participate in the growing trend of exporting petroleum-related products overseas.