Page 8 - NorthAmOil Week 41

NorthAmOil PIPELINES & TRANSPORT NorthAmOil
Indigenous coalition seeking to buy 51% stake in Trans Mountain
WESTERN CANADA
THE Western Indigenous Pipeline Group, which represents 55 First Nations, has said that it wants to buy a 51% stake in the Trans Mountain pipe- line project from the Canadian government. The announcement comes ahead of Canada’s federal election on October 21, and the group has said it will work with whoever wins.
Canada’s Liberal government bought the Trans Mountain pipeline – and its proposed expansion project – from Kinder Morgan in May 2018 for $4.5bn, on concerns that the pipeline operator would scrap the expansion. The move came after years of delays to the expansion pro- ject, which would nearly triple the capacity on Trans Mountain, which runs from Alberta to the British Columbia coast, to 890,000 barrels per day (bpd).
The cost of the expansion has escalated as the project has continued to be held up, with Can- ada’s Federal Court of Appeal overturning the project’s approval in August 2018. The project then had to go through a new regulatory review before being re-approved by Ottawa in June 2019. The expansion is now being estimated to cost roughly CAD9.3bn ($7.0bn), though some believe it could cost up to CAD12bn ($9.1bn).
These estimates come amid warnings that addi- tional delays to the project are likely, and will cause its costs to rise still further.
The Canadian government has said that it ultimately wants to sell the pipeline.
The Western Indigenous Pipeline Group is one of three indigenous-led collectives that want to buy a stake in Trans Mountain. The Whisper- ing Pines/Clinton Indian Band’s chief, Michael LeBourdais, who is also the group’s director, said this coalition was unique because the 55 bands that make it up are located along the pipeline’s route.
“We bear all the risk, so these are the guys who are looking to have some equity benefit and environmental oversight,” he was quoted by the Edmonton CityNews
LeBourdais noted that the First Nations along the pipeline’s route are the most familiar with how the pipeline operates. This is among the rea- sons he believes the Western Indigenous Pipeline Group would be the front-runner in a bid to buy into Trans Mountain.
“We would be the lead because we’re the only First-Nations-populated structure that has an operator and a bank,” he said.™
Goodnight given $500mn capital boost
US
WATER infrastructure operator Goodnight Midstream has announced that it has closed a “significant capital investment and an incre- mental commitment” from private equity firm Tailwater Capital. The investment comes months after TPG Capital pulled out of a deal to buy Goodnight for $930mn when the water pipeline firm was unable to satisfy certain closing condi- tions attached to the agreement.
The deal was thought to hinge in part on Goodnight securing a contract with an uni- dentified oil producer that did not materialise. However, sources familiar with the matter told Bloomberg last week that negotiations for that contract were still taking place. Goodnight said in a statement that it had recently signed five new contracts with producers in the Permian’s Del- aware sub-basin and the Bakken play in North Dakota.
Tailwater, which has been an investor in Goodnight since 2016, has committed over $500mn of growth capital to support Goodnight’s strategic objectives as part of the transaction. According to Bloomberg’s sources, a portion of the commitment would
come from Tailwater’s fourth midstream energy fund, with the remainder deriving from a co-investment fund specifically tar- geting Goodnight.
Goodnight operates around 500 miles (805 km) of produced water pipelines with 1.6mn barrels per day of throughput capacity, over 700,000 bpd of which serves the Delaware Basin alone. Since receiving its initial investment from Tailwater, Goodnight has expanded its Bakken operations and entered the Eagle Ford shale and both the Delaware and Midland sub-basins in the Permian.
The company recently brought two pipeline systems in the Permian Basin into service that will move 600,000 barrels of wastewater from production wells to disposal sites.
Goodnight describes itself as a pioneer in the produced water midstream sector, which is rapidly expanding as growing shale production results in rising volumes of oilfield wastewater growth. The company said it expected the sec- tor to require multi-billion dollar investments to accommodate projected volume growth in the basins where it operates.™
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w w w . N E W S B A S E . c o m Week 41 15•October•2019