News -March 2019

March 2019


TAP Gas Pipeline Completes $4.5 Billion Project Financing

The Trans-Adriatic Pipeline (TAP) completed its $4.5 billion (3.9 billion euros) project financing, paving the way for construction to be completed for start-up in 2020.
TAP, the final leg of a $40 billion Southern Gas Corridor project to transport gas from Central Asia to Western Europe, is central to the European Union’s plans to move away from Russian gas. TAP will be the first non-Russian gas pipeline to supply Europe since the Medgaz began delivering from Algeria to Spain in 2011.
The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) approved loans for the project in 2018. The rest of the financing has come from export credit agencies and a group of 17 commercial banks, which include Bank of China, BNP Paribas, Societe Generale and UniCredit, according to Reuters.
TAP will ship as much as 10 Bcm of natural gas annually from the Shah Deniz II field in Azerbaijan to Italy.

Israel, Greece, Cyprus to Ink Natural Gas Pipeline Deal
Israel plans to sign an agreement in early 2019 with Greece and Cypress to build a $7 billion natural gas pipeline to Europe from the eastern Mediterranean to Europe with the support of the U.S.
Speaking at a late-December summit with the Greek and Cypriot leaders in southern Israel, Netanyahu said the three nations reaffirmed their commitment to the pipeline and discussed “important aspects” of the project. Italy is also a partner in the pipeline’s planning. Cyprus President Nicos Anastasiades said the project is waiting for a green light from the European Union to move forward.
Israel has been developing natural gas fields off its Mediterranean coast for the past decade. Its Tamar field already is operational, while the larger Leviathan field is expected to be operational next year. Israel uses most of its own gas production but has signed export deals with Egypt and Jordan and has its eyes on the larger European market.
The proposed pipeline would allow Israel and Cyprus to export their recently discovered offshore reserves to Italy and eventually to the rest of Europe. Greece, which would act as a conduit for the gas to the continent, could also use the pipeline to convey any hydrocarbons potentially found in its own waters.

Williams, Targa Plan New Pipeline Projects
Williams and Targa Resources announced new NGL agreements and pipeline projects that will link the Kansas and Mont Belvieu, Texas, markets.
Williams will build a 188-mile Bluestream Pipeline from its fractionator in Conway, Kan, and the southern terminus of Overland Pass Pipeline to an interconnect with Targa’s Grand Prix NGL Pipeline in Kingfisher County, Okla.
Targa will construct a 110-mile extension of Grand Prix from southern Oklahoma into the Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties) STACK region of Central Oklahoma where it will connect with Williams’ new Bluestream Pipeline.
In connection with the project, Williams committed “significant volumes” to Targa for transport on Grand Prix and fractionate at Targa’s Mont Belvieu facilities. Williams will also have an initial option to purchase a 20% equity interest in one of Targa’s recently announced new fractionation Trains 7 or 8 in Mont Belvieu.
Targa’s Grand Prix extension will have an initial capacity of 120,000 bpd and is expected to cost $200 million. Targa and Williams are targeting an in-service date in the first quarter 2021 for both the Grand Prix extension and the new Bluestem Pipeline.
As part of the project, Williams also plans to expand the DJ Lateral of the Overland Pass Pipeline and make improvements at its Conway NGL Storage facility. Williams expects its investment in these NGL logistics projects to be $350 million to $400 million.

Energy Transfer’s Permit Work on Hold by Pa. Regulators
Pennsylvania environmental regulators said all permit work for Energy Transfer (ET) has been suspended due to a failure to comply with an October order after an explosion on the Revolution natural gas pipeline in the western part of the state.
ET told Reuters the action does not affect operation of any pipeline that is in service or construction where permits have already been issued, adding that it is “committed to bringing the Revolution project into full compliance with all environmental permits and applicable regulations.”
Gov. Tom Wolf said the permit suspension by the state’s Department of Environmental Protection (DEP) will affect the in-service date for Revolution, which is currently not in service, and the Mariner East 2 pipeline. Part of Mariner East 2 went into service at the end of December.
Wolf said 27 approvals are under review by DEP for Mariner East 2. He said Revolution, a gas gathering line that feeds ET’s Rover and Mariner East pipelines, will remain closed until full compliance has been achieved.
The Revolution incident occurred Sept. 10. The DEP in October ordered Energy Transfer to “stabilize disturbed areas” of Revolution and “prevent further erosion from the construction area.” The DEP, however, said the company “had not fulfilled the terms of the order and was not progressing toward compliance.”

Colombia’s Cano Limon Pipeline Bombed for 6th Time this Year
Colombia’s Cano Limon pipeline was bombed again in mid-February, state-run oil company Ecopetrol said, the sixth time it has been attacked this year.
The bombing, which took place in the La Colorada area of Arauquita municipality near the border with Venezuela, spilled crude oil into a dry riverbed nearby, Ecopetrol said.
There were more than 80 attacks on the 485-mile (780-km) pipeline in 2018, which kept it offline for most of the year.

Reversed Capline Crude Pipeline Service Expected to Begin 2020
Plains All American also expects the Cactus II pipeline to be partially in service later this year.
Photo courtesy of Plains All American

The Capline crude pipeline from the U.S. Midwest to the Gulf Coast is expected to begin service in the third-quarter of 2020.
The target in-service date for the reversed line is the third quarter of 2020 for light oil service and early 2022 for heavy oil service, Plains All American Pipeline officials during a quarterly earnings call.
Capline is the largest crude pipeline that currently runs from the Gulf Coast to refineries in the Midwest. Volumes on Capline, once a major artery for imports and Gulf of Mexico crude used by U.S. Midwest refiners, have declined sharply as the U.S. shale boom pushed inland crude to the East Coast and Gulf Coast.
Pending a successful open season, the Cushing to St. James movement would include a 200,000 bpd of expansion and a modest extension of the Diamond JV pipeline that will connect to Capline, Plains said.
The company said it is also making progress on its Cactus II pipeline with partial service expected in the late third quarter of 2019, with full-service by April 2020.
Plains said its Corpus Christi, Texas, and St. James facilities could both look into further crude export capabilities.

US Government Appeals Ruling Against Keystone XL
The Trump administration is appealing a court ruling that blocked the Keystone XL oil pipeline.
Justice Department attorneys in February appealed the November ruling from U.S. District Judge Brian Morris that blocked a construction permit for the 1,184-mile (1,900-km) pipeline.
The line sponsored by Calgary-based TransCanada would begin in Alberta and shuttle as much as 830,000 bpd of crude through a half dozen states to terminals on the Gulf Coast.
It was rejected by former President Barack Obama in 2015. That decision was reversed in 2017 by President Donald Trump, who has promoted the $8 billion project as part of his effort to boost American energy industries.
After environmental groups sued, Morris said the administration had not fully considered potential oil spills and other impacts, and that further reviews were needed.

Howard Energy, NextEra Adding Eagle Ford Gas Transportation Assets Howard Energy Partners (HEP) and
NextEra Energy Partners entered into a joint venture (JV) to develop additional natural gas transportation opportunities in the Eagle Ford shale region of South Texas.
The JV will market capacity on NextEra Energy’s Eagle Ford Midstream system and HEP’s Eagle Ford Gathering system (EFG) and evaluate additional pipeline options in an area including Webb, Duval, Zapata, Dimmit, La Salle, McMullen, Live Oak and Jim Wells counties.
The existing EFG system, located in Webb County, consists of 215 miles of lean gas gathering pipeline with 1 Bcf/d of throughput capacity. The existing EFM system is a 150-mile, 30- and 16-inch lean gas transportation pipeline originating in La Salle County and spanning portions of McMullen, Duval, Jim Wells, and Nueces counties. It terminates at the Agua Dulce hub in Nueces County.
“The synergies between HEP’s and NextEra Energy Partners’ Eagle Ford assets provide for a compelling footprint,” said HEP CEO Mike Howard, who added the connection to the system provides producers with “a direct link to Agua Dulce, bringing new supplies to the emerging markets in Mexico and the Texas Gulf Coast.”