Page 15 - NorthAmOil Week 01 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Kinder Morgan starts up Permian Highway

TEXAS KINDER Morgan announced this week that its plants that were dealing with mounting cargo
Permian Highway gas pipeline had entered full cancellations, this raised questions over whether
commercial service on January 1. The pipeline all of the planned new pipeline capacity would
carries natural gas from the Waha Hub in the be needed.
Permian Basin to Katy, Texas, from where it can Despite the pandemic-related gas slowdown,
be shipped on to markets on the US Gulf Coast some gas pipeline developers are still determined
and in Mexico. to push ahead with their plans. Also this week,
Permian Highway has the capacity to carry up Summit Midstream Partners and ExxonMo-
to 2.1bn cubic feet (59.5mn cubic metres) and is bil asked US energy regulators for permission
fully subscribed under long-term contracts. In to start building their Double E gas pipeline in
its statement the company touted the pipeline’s Texas and New Mexico. That pipeline would
capacity as helping to reduce flaring in the Per- have a capacity of 1.35 bcf (38.2 mcm) per day,
mian, where gas is generally a product of drilling and would transport Permian gas to the Waha
for oil. Hub.
Producers have been struggling to capture Separately, the 2.0 bcf (56.6 mcm) per day
and ship their associated gas output for some Whistler pipeline from the Permian Basin to the
time, causing pipeline developers to scramble Agua Dulce Hub near Corpus Christi, on the
to build new gathering and takeaway capacity. Gulf Coast, is under construction, and due to
The push for new gas pipelines out of the Per- enter service in the third quarter of 2021. But the
mian has also been bolstered by the expansion fate of other planned pipelines remains uncer-
of new gas liquefaction and export capacity on tain. Indeed, early last year Kinder Morgan said
the Gulf Coast. However, when the coronavirus the schedule for its proposed Permian Pass pipe-
(COVID-19) pandemic hit both Permian gas line was uncertain, as it was struggling to secure
production and feed gas demand from LNG contracts with shippers.™

Port of Corpus Christi approves

oil export terminal plan

TEXAS GULF THE Port of Corpus Christi on the Texas Gulf Currently, the Louisiana Offshore Oil Port
COAST Coast finalised leasing and pipeline easement (LOOP) is the only US facility that can fully load
agreements in the second half of December for a VLCCs without reverse lightering from smaller
proposed deepwater crude export terminal. vessels. Aside from Bluewater, several other
The terminal, which is still in the process proposals for ports that can handle VLCCs are
of obtaining all necessary regulatory approv- under review by regulators, though some have
als, would be developed by Bluewater Texas already been abandoned given a crowded field
Terminal – a joint venture between Phillips 66 for new oil export projects.
and commodity trader Trafigura. The project Indeed, Trafigura previously dropped plans
involves a plan to build two single-point moor- for a competing project, opting to team up on
ing buoys 21 nautical miles (39 km) from the the Bluewater joint venture instead. And Carlyle
mouth of the Corpus Christi Ship Channel, as Group pulled out of the Lone Star Ports project
well as two new pipelines and an operations in October 2019, leaving Berry Group as the sole
facility on Harbor Island. The plan is aimed at backer of that project.
providing another outlet for US crude exports, So far, only Sentinel Midstream’s Texas
which have boomed in recent years as exporters GulfLink proposal offshore Houston has
have scrambled to propose new infrastructure at received a draft environmental impact state-
ports to handle additional oil volumes. ment (EIS) from the US Maritime Adminis-
Under the current proposal, Bluewater tration (MARAD). However, confidence in
would load nearly 2mn barrels per day (bpd) of all of the remaining proposals going ahead
crude, giving it the capability to fill up one very appears to be waning, with the Port of Cor-
large crude carrier (VLCC) in around 24 hours. pus Christi’s CEO, Sean Strawbridge, saying
Accounting for ship traffic and logistics, the in mid-December that Bluewater would
project would be able to service 16 VLCCs per “likely be the only offshore loading facility
month. in Texas”.™

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