Page 8 - NorthAmOil Week 33

NorthAmOil PIPELINES & TRANSPORT NorthAmOil
EPIC begins Permian crude shipments
TEXAS
Construction of EPIC’s permanent crude pipeline is over 50% complete, with start- up of the mainline scheduled for the rst quarter of 2020.
EPIC Midstream Holdings has started crude shipments from the Permian Basin to the Texas Gulf Coast. e news was reported by Reuters, which said terminal operator Moda Midstream had con rmed it would start accepting Permian crude from the EPIC pipeline by August 16, a er shipments began the previous day.
EPIC subsequently con rmed the start-up of interim shipments on its Y-Grade pipeline from Crane, Texas, to the Corpus Christi area of the coast on August 19. e company noted that construction of its permanent crude pipeline was over 50% complete, with start-up of the mainline scheduled for the rst quarter of 2020. When the permanent pipeline enters service, the Y-Grade pipeline will be changed back to shipping natural gas liquids (NGLs).
e interim pipeline will carry 400,000 bar- rels per day of crude, with EPIC reserving 10% of capacity for spot shipments. e permanent pipeline will have an initial capacity of 600,000 bpd.
e EPIC crude project is the second major Permian pipeline to enter service this month, a er Plains All American Pipeline’s 670,000 bpd Cactus II. A third pipeline being built by Phil- lips 66 will contribute a further 900,000 bpd of
Permian takeaway capacity when it comes online later this year.
The new pipelines are providing much- needed relief to producers in the basin, which have been struggling with takeaway capacity shortages that have weighed on regional crude prices. Last week, Midland crude prices rose to $0.50 per barrel above US crude futures as EPIC launched operations of its pipeline, having been previously trading at a discount.
Indeed, EPIC’s decision to convert its NGL pipeline temporarily to crude servicing came as a result of the Permian takeaway capacity crunch, which started to a ect the region last year.
“Providing interim service adds much- needed takeaway capacity in the Permian Basin, which supports continued development and highlights the strategic value of our assets,” said EPIC’s CEO, Phillip Mezey, in a statement.
EPIC also noted that its rst crude export dock, which will be capable of loading Afra- max-sized vessels, is due to be in service before the end of 2019. A second crude export dock is also under construction, with start-up tar- geted for the second quarter of 2020. e sec- ond dock will give EPIC the capability to load Suezmax vessels.™
INVESTMENT
US regulators approve Caesar-Tonga stake sale
GULF OF MEXICO
Caesar-Tonga is tied back to Anadarko’s Constitution spar.
THE US Bureau of Ocean Energy Management (BOEM) has approved Royal Dutch Shell’s sale of its 22.45% stake in the Caesar-Tonga oil eld in the US Gulf of Mexico to Norway’s Equinor. e transaction, amounting to $965mn in cash, was rst announced in May.
Equinor said in an August 19 statement that as a result of the transaction, its stake in the Ana- darko Petroleum-operated eld had now risen to 46%. Anadarko – which has just been taken over by Occidental Petroleum – has a 33.75% stake in Caesar-Tonga, while Chevron owns the remaining 20.25%.
The transaction comes after Israel’s Delek Group rst agreed to buy Shell’s Caesar-Tonga stake in April. However, Equinor, as Shell’s part- ner in the eld, exercised its preferential right to buy the stake instead.
Shell said at the end of July that it had com- pleted the sale of the stake to Equinor, but the nal deal was subject to the approval of the lease assignments by the BOEM.
“Deepwater Gulf of Mexico forms an
important part of Equinor’s portfolio,” said Equinor’s senior vice-president for development and production for offshore North America, Christopher Golden, when the company’s move was rst announced. “ is deal will strengthen our position in this proli c basin and build on the recent discovery in the Blacktip well. Later this year we will be drilling the Equinor-operated Monument prospect, which has the potential to further develop our position in the Gulf of Mex- ico,” he added.
Caesar-Tonga is estimated to be one of the 10 largest deepwater resources in the US Gulf, and is expected to remain in production for an additional 30 years. e eld, which is tied back to Anadarko’s Constitution spar, was brought online in 2012. Its current output is 71,000 bar- rels of oil equivalent per day (boepd), comprised of 90% oil.
e acquisition of the Caesar-Tonga stake gave Equinor an additional 15,000 boepd of out- put. e company’s Gulf assets now produce a combined total of more than 130,000 boepd.™
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w w w . N E W S B A S E . c o m Week 33 20•August•2019