December 2019, Vol. 246, No. 12

Projects

Projects

Denmark Approves Nord Stream 2 Project

Denmark’s energy agency approved the Nord Stream 2 gas pipeline project in Danish waters, removing the last major hurdle for the Russian-led gas pipeline project that has divided the European Union.

The Danish permit was the last one needed for the 765-mile (1,230-km) Nord pipeline, which faced criticized by the United States and several other countries fearing it will increase Europe’s reliance on Russian gas. 

The Danish Energy Agency (DEA) said in a statement that it had granted a permit to Nord Stream 2 to construct a 91-mile (147-km) section of the twin-pipeline southeast of the Danish island of Bornholm in the Baltic Sea.

Gazprom has completed more than 87% of Nord Stream 2 but since April 2017 has had pending applications with Danish authorities to lay between 147 and 175 km via Danish waters, according to Reuters.

Nord Stream 2 will have to wait another month before the permit can be used, according to Danish law, which gives parties the option to complain up to four weeks after the decision, the DEA said.

When completed, the pipeline would be capable of carrying 55 Bcm of natural gas a year.

2 Midland Pipeline Expansions Add 900,000 bpd Total

Enterprise Products Partners expects its Midland-to-ECHO 3 and 4 Permian crude pipeline system expansions will add about 450,000 bpd each of additional capacity. The system transports crude from Midland, Texas, to Enterprise’s ECHO terminal in Houston.

The expansion is scheduled for completion in the third quarter of 2020 and can be further expandable up to 540,000 bpd.

The addition of new pipelines this year has helped alleviate a bottleneck in the Permian, the biggest oil basin in the country, where prices slumped to the lowest levels in about four years in 2018. Oil production growth in the Permian has slowed in recent months as drillers reduce the number of oil rigs, focusing more on earnings growth instead of increased output.

However, Jim Teague, chief executive of Enterprise’s general partner, told Reuters, “Our customers are large producers. I don’t see someone like Exxon or Chevron slowing down.”

Marine terminal volumes jumped to a record 1.9 MMbpd in the third quarter compared to 1.5 MMbpd a year earlier.

Russia Says Bulgaria to Complete TurkStream Portion by 2020

Bulgaria said it will complete its 300-mile (474 km) stretch of the TurkStream natural gas pipeline by 2020 as planned, Russian Foreign Minister Sergei Lavrov said at a news briefing.

Bulgarian state gas firm Bulgartransgaz raised $222 million (200 million euros) in short-term loans to help finance the extension of the pipeline project. The company initially sought loans of up to $167 (150 million euros).

The Balkan Stream is targeted to become operational in 2020, but some industry officials have doubt. Russia, which is building TurkStream to bypass Ukraine to the south, has said its second 15.8 Bcm portion of the pipeline will pass via Bulgaria to central Europe.

Bulgaria recently opened a 7-mile (11-km) pipeline linking its transportation network with Turkey as part of its push to transport Russian natural gas from TurkStream to central Europe.

Russia plans to launch the first part of the pipeline, with an annual capacity of 15.75 Bcm prior to 2020.

Enbridge Wins Court Backing to Build Great Lakes Pipeline Tunnel

A Michigan judge signed off on an agreement between the state and Enbridge allowing the operator to build a tunnel under the Great Lakes for its Line 5 pipeline. The pipeline will remain in operation during the construction.

“We continue to believe the tunnel is the best solution for Michigan and that Line 5 can continue to be safely operated during the period while the tunnel is being constructed. And we are committed to build it,” Enbridge said in a statement.

Michigan Attorney General Dana Nessel said the state would appeal the court’s decision to allow the tunnel, which will be beneath the Straits of Mackinac at the location it meets Lakes Huron and Lake Michigan.

The Line 5 pipeline ships 540,000 bpd of light crude oil and propane and delivers Canadian crude to the United States and eastern Canada.

Magellan Midstream to Redesign Proposed Voyager Pipeline

Magellan Midstream Partners will redesign the Voyager crude pipeline proposal to lower costs following an open season to solicit shipper interest ended in August, Chief Executive Michael Mears told investors.

The proposed pipeline will run from the storage terminal in Cushing, Okla., and from Midland, Texas, in the Permian Basin, to its facilities in the Houston area.

Magellan has not made a final decision to proceed with the project, he said, but the pipeline us scheduled to come into service in late 2020 with an initial capacity of 300,000 bpd.

Seaway Planning Open Season on Cushing-to-Gulf Coast Expansion

Seaway Crude Pipeline Company plans to hold an open season to gauge shipper support for an expansion of crude oil capacity on its existing system originating in Cushing, Okla., and extending to the Texas Gulf Coast area.

The expansion could provide an incremental 200,000 bpd of light crude capacity and include further quality enhancements in the segregation of heavy and light crude shipments.

Seaway offers access to a fully integrated midstream network of pipelines, storage facilities, and export terminals along the Gulf Coast and provides connectivity to refineries in the Houston, Freeport, Texas City and Beaumont/Port Arthur areas.

Initial expansion capacity could be available by mid-2020, with the expansion fully in-service in 2022. The final capacity for committed and uncommitted service would be determined during the open season.

Seaway is targeting $1.25 per barrel for light crude oil pipeline transportation from Cushing to the Gulf Coast.

Centurion Pipeline Launches Binding Open Season for Augustus Pipeline

Centurion Pipeline is holding a binding open season to solicit shipper commitments for a proposed crude oil pipeline from Midland, Texas, to Crane, Texas.

The Augustus Pipeline will connect Centurion’s existing Midland Terminal, which has 2 million barrels of storage capacity, to multiple long-haul pipelines originating at Crane.

The project will include a combination of new and existing pipeline assets and will have an initial throughput capacity of 150,000 bpd. The pipeline is expected to be in service in the fourth quarter of 2020.

The binding open season will end, Dec. 9.

Centurion Pipeline, a wholly owned subsidiary of Lotus Midstream, is a crude oil operator that owns and operates 3,000 miles of pipeline extending from southeast New Mexico across the Permian Basin of West Texas to Cushing, Okla.

Latest Mountain Valley Delay Increases Cost Estimate

QM Midstream Partners pushed back the completion date for its long-delayed Mountain Valley natural gas pipeline from West Virginia to Virginia until late 2020 and boosted the estimated cost to $5.3-$5.5 billion.

The company had targeted a mid-2020 for full service at a cost of $4.8-$5 billion.

When EQM began construction in February 2018, it estimated Mountain Valley would cost $3.5 billion and be completed by the end of 2018.

On Oct. 15, the U.S. Federal Energy Regulatory Commission (FERC) issued an order halting forward-construction progress in response to the U.S. 4th Circuit Court of Appeals decision granting a stay of a permit issued by the U.S. Fish and Wildlife Service in November 2017.

QM Midstream said it expected total work on the project will be about 90% complete by the end of 2019. The company said its three compressor stations and three certificated interconnects are 100% complete; about 80% of the pipeline work is complete, which includes 264 miles (425 kilometers) of pipe welded and in place; and approximately 50% of the right-of-way has been restored.

The 303-mile pipeline is designed to deliver 2 Bcf/d of gas from the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia to the Mid-Atlantic and Southeast.

State Board Approves Dakota Access Pipeline Pump Station

Commissioners in a South Dakota county approved a conditional use permit for a pumping station needed for an expansion of the Dakota Access Pipeline. The station will be built outside of Harrisburg in southeastern portion of the state.

Energy Transfer said in early summer it will expand the pipeline’s capacity from more than 500,000 bpd to 1.1 MMbpd. The pipeline has moved North Dakota oil to a hub in Illinois since mid-2017.

The Lincoln County Planning Commission approved the project last month. But members of Dakota Rural Action, a South Dakota environmental group, appealed the decision to the county board.

The company will also need additional stations in North Dakota and Illinois.

Enterprise to Expand ATEX Pipeline after Successful Open Season

Enterprise Products Partners will move ahead with the Appalachia-to-Texas (ATEX) ethane pipeline expansion after a successful 30-day binding open season.

The 1,200-mile pipeline transports ethane from the Marcellus/Utica Basin of Pennsylvania, West Virginia and Ohio to Enterprise’s natural gas liquids storage complex in Mont Belvieu, Texas.

The current capacity of ATEX is 145,000 bpd. Enterprise said it is evaluating expansion alternatives that would boost capacity more than 30% to 190,000 bpd – an increase of 45,000 bpd. The incremental capacity is expected to be achieved through improvements and modifications to existing infrastructure.

Houston-based Enterprise said it expects the incremental capacity to be available by 2022.

“The success of the open season reflects the demand for additional, reliable ethane takeaway capacity from the Appalachian region of the country,” said Michael C. “Tug” Hanley, senior vice president, Pipelines and Terminals for Enterprise’s general partner.

“The expansion of ATEX will facilitate growing production from the Marcellus/Utica Basin and will provide access to attractive markets on the Gulf Coast through Enterprise’s integrated midstream network,” Hanley said.

Harvest Starts Construction of Ingleside Pipeline, Terminal

Hilcorp Energy affiliate Harvest Midstream plans to begin of construction for the 24-mile Ingleside Pipeline and the Harvest Midway Terminal.

The 24-inch oil pipeline that will originate from the Harvest Midway Terminal and connect to multiple oil export terminals in the Ingleside area, including the Flint Hills Resources Ingleside Terminal and the South Texas Gateway Terminal being developed by Buckeye Partners.

The Ingleside Pipeline will have a final capacity of 600,000 bpd with up to 380,000 bpd supplied by the existing Harvest Eagle Ford Pipeline Systems is expected to begin early 2020.

EPIC Crude Oil Pipeline Announces Another Open Season

EPIC began a third open season for its EPIC Crude Oil Pipeline, which will continue until Dec. 17. The first two open seasons closed successfully in July and September 2018.

The pipeline runs parallel to the EPIC Y-Grade Pipeline that extends from Orla, Texas, to the Port of Corpus Christi, Texas, and includes terminals in Orla, Saragosa, Crane, Wink, Midland, Upton, Hobson and Gardendale, with connectivity to the Corpus Refining market and several other terminals.

EPIC began interim crude operations in August, using the 24-inch Y-Grade Pipeline, which can ship up to 400,000 bpd. Once the planned 30-inch Crude Oil Pipeline is completed in the first quarter of 2020, EPIC will have initial capacity to transport 600,000 bpd, which can be expanded to 900,000 bpd.