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

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

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

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

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

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."