Page 16 - NorthAmOil Week 02 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Summit cleared to proceed

with Double E construction

PERMIAN BASIN SUMMIT Midstream Partners announced – at the beginning of January (See NorthAmOil
this week that it had been granted its notice to Week 01). Kinder Morgan has already been oper-
proceed with construction of the Double E gas ating the 2.0 bcf (56.6 mcm) per day Gulf Coast
pipeline in the Permian Basin by the US Federal Express pipeline since 2019. Both of its pipelines
Energy Regulatory Commission (FERC). The run from the Waha area. Other pipelines from
company requested permission to begin con- Waha are also under development, with the
struction earlier in January. Whistler pipeline due to enter service later this
The Double E pipeline stands out from some year. Thus Summit is seeking to send more gas to
of the other proposed natural gas pipelines Waha in anticipation of higher demand to ship
because it will be an intra-basin one, rather than gas out of the basin via the hub.
providing takeaway capacity to the Gulf Coast. It The FERC said general construction on Dou-
will stretch 135 miles (217 km), carrying around ble E could begin in all areas except for about 2
1.35bn cubic feet (38.2mn cubic metres) per day miles (3.2 km) of the planned route. Work on the
of gas from the Delaware Basin portion of the remaining route will need to be requested and
Permian to the Waha gas hub in West Texas. It approved separately, the regulator said in a Jan-
is expected to enter service in the fourth quarter uary 12 letter.
of this year. Summit owns a 70% stake in Double E, while
Takeaway capacity out of the Permian is ris- ExxonMobil holds the remaining 30% inter-
ing, with Kinder Morgan having started up its est. The company said it would provide further
second major gas pipeline out of the basin – the details of its financing plans for the pipeline later
2.1 bcf (59.5 mcm) per day Permian Highway this quarter.™
INVESTMENT

CAPP forecasts 14% increase in

Canadian upstream investment

CANADA THE Canadian Association of Petroleum Pro- have exited the oil sands, with the assets increas-
ducers (CAPP) said this week that it expected ingly being consolidated in the hands of a few
investment in upstream oil and gas in the large Canadian players.
country to rise by 14% in 2021. The projection This made for difficult market conditions for
comes on hopes that the roll-out of new vac- the oil sands, which were severely exacerbated
cines against coronavirus (COVID-19) will help by the COVID-19 pandemic and its impact on
boost economic activity and energy demand oil demand and prices last year. Indeed, CAPP
globally. noted that investment into the industry last year
Canada’s oil sands CAPP said it anticipates that capital expend- was the lowest it had been in over a decade. The
have been falling out of iture on oil and gas will rise by CAD3.36bn group hopes that the increase it expects this year
favour with investors in ($2.65bn) this year to reach CAD27.3 ($21.6bn), will mark the beginning of a longer-term eco-
recent years. compared with an estimated CAD24bn ($19bn) nomic recovery.
spent in 2020. The additional spending is primarily pre-
The organisation, which represents Cana- dicted to be focused on Alberta and British
dian oil and gas companies, noted that the Columbia, with only modest improvement and
anticipated increase would halt the “dramatic” offshore investment in Atlantic Canada antici-
decline in spending since 2014, when invest- pated to remain “relatively stable” compared to
ment amounted to CAD81bn ($64bn). This was 2020. CAPP expects conventional oil and gas
the last time oil prices were trading around $100 investment to rise to CAD20.0bn ($15.8bn)
per barrel, helping to attract investors to costly in 2021, up from an estimated CAD17.2bn
oil sands megaprojects. While prices have been ($13.6bn) last year, with oil sands spend-
lower since, the international appetite for oper- ing increasing to CAD7.3bn ($5.8bn) from
ating in the oil sands has also dwindled because CAD6.7bn ($5.3bn). The lower oil sands figure
of the resource’s public image as a high polluter. illustrates how that industry remains compara-
Over the past few years, international producers tively out of favour.™

P16 www. NEWSBASE .com Week 02 14•January•2021