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US authorises Gulf LNG exports
MISSISSIPPI
THE US Department of Energy’s (DoE) O ce of Fuel Energy has approved exports from Kinder Morgan’s Gulf LNG project, which would be located in Jackson County, Mississippi. The export facility would be built at the site of an existing import terminal. Kinder Morgan started the application process to redevelop part of the project for exports in mid-2015.
Under the DoE authorisation, Gulf LNG will be able to export up to 1.53bn cubic feet (43mn cubic metres) per day to countries with which the US does not have a free trade agreement (FTA). e authorisation follows the US Fed- eral Energy Regulatory Commission’s (FERC) decision to approve construction of the project in mid-July. A nal investment decision (FID) still needs to be made on the project.
If Kinder Morgan decides to proceed with Gulf LNG, it will be its second export project a er Elba Island LNG, which is currently moving towards start-up a er several months of delays. The two projects are substantially different – Elba Island consists of 10 small-scale liquefac- tion units, each with a capacity of 0.25mn tonnes per year. Meanwhile, the Gulf LNG liquefaction project includes two trains with a total capacity
of up to 11.5mn tpy. e terminal will be bi-di- rectional, retaining the ability to receive gas if market conditions change.
“We are pleased with the Department of Energy’s approval of the liquefaction project at our existing Gulf LNG facility,” Kinder Morgan said in a statement. “While this is an important step, there are still multiple factors that need to be met before reaching a nal investment decision [FID] needed to begin this project.”
Southern Gulf LNG, an indirect subsidiary of Kinder Morgan, owns a 50% stake in the lique- faction project through Gulf LNG Liquefaction. underbird LNG – a company partially owned by Blackstone Group subsidiary GSO Capital Partners – has 30% in the venture. Subsidiaries of Arc Logistics Partners and Lightfoot Cap- ital Partners share the remaining 20% almost equally.
Including Gulf LNG, the DoE has approved 34.5 bcf (978mn cubic metres) per day of exports of LNG and compressed natural gas (CNG) exports to non-FTA countries. Around 14 bcf (396 mcm) per day of this is now in operation or under construction.
Plains completes Cactus II as new partners buy into project
TEXAS
PLAINS All American Pipeline has announced that it has completed its Cactus II pipeline from the Permian Basin in West Texas to the Corpus Christi area on the Texas Gulf Coast. e news comes as Permian drillers are eagerly waiting for new pipeline capacity out of the basin to come online, alleviating some of the pressure on regional oil prices and easing takeaway capacity bottlenecks.
Plains’ CEO, Willie Chiang, said on the com- pany’s second-quarter earnings call that partial crude ows would begin on Cactus II next week. e pipeline is anticipated to be fully operational in the rst quarter of 2020.
Meanwhile, Plains’ Wink-to-Webster crude pipeline project, which it is building in partner- ship with ExxonMobil, is also in progress, and anticipated to come online in 2021.
Plains also said it had brought additional partners on the Wink-to-Webster pipeline. Marathon Petroleum’s pipeline spino , MPLX, and Israel’s Delek Group decided to buy into the project after another crude pipeline they were partnering on was scrapped this spring.
Diamondback Energy’s new pipeline spinoff, Rattler Midstream Partners, has also bought into the Wink-to-Webster pipeline. Houston-based Lotus Midstream was already a partner on the 650-mile (1,046-km) pipeline project.
Plains will decrease its interest in the pipeline from 20% to 16% as a result of bringing the new partners on board. It will continue to lead the project.
Delek US Holdings’ 15% stake in the Wink- to-Webster project is estimated to be worth $340-380mn. The deal comes after Delek Logistics Partners, the company’s logistics arm, acquired a 33% interest in the Red River crude pipeline from Plains in May.
In a separate Permian midstream deal this week, an a liate of Qatar Investment Authority (QIA) acquired a stake in Oryx Midstream Ser- vices from an a liate of Stonepeak Infrastruc- ture Partners. In addition, QIA has committed to invest in the development of Oryx alongside Sto- nepeak. e total QIA investment in Oryx, the largest privately held midstream crude operator in the Permian Basin, will be roughly $550mn.
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w w w . N E W S B A S E . c o m Week 31 08•August•2019
