Hess files IPO registration
Hess Corp. subsidiary, Hess Midstream Partners LP, has filed a registration statement with the US SEC related to its proposed IPO of common units representing limited partner interests. The offering is expected to occur in the first quarter of 2015. Hess Midstream Partners intends to list its common units on the NYSE under the symbol "HESM." The number of common units to be offered and the price range for the offering have not yet been determined. Goldman, Sachs & Co. and Morgan Stanley will act as joint book-running managers.
Dominion accepts FERC order
Dominion notified the Federal Energy Regulatory Commission that it has accepted the order approving the Cove Point LNG liquefaction and export project and all of FERC's environmental conditions. The FERC issued the order approving the project and 79 related environmental conditions on September 29, 2014. The construction of the export project is estimated to cost between $3.4 billion and $3.8 billion.
Willbros, Google hold Innovation Summit
Willbros and Google hosted an Innovation Summit in New York City on August 22, 201 to showcase the cloud-based information system, Integra-Link™. Using Google's mapping technology, Willbros developed the system to help utility companies manage, maintain, and map their infrastructures - and meet governmental regulations. The technology collects, organizes, visualizes, verifies, and analyzes field data in real-time, anywhere around the world. Keynote speaker and Willbros president of engineering and technology, Ed Wiegele, said, "Federal and state regulators require operators to have data readily available.
Integra-Link provides that in an efficient information system. If there's an emergency, operators can respond quickly. If there are deficiencies in the pipeline system, they can be corrected in a timely manner." Willbros senior product manager, Colby Smith, noted that the technology developed by Willbros and Google, "...not only enhances utility reliability, but increases the public's confidence in North America's energy infrastructure." Willbros and Google will hold multiple Innovation Summits in service areas across the US to offer investors, potential clients, and analysts the opportunity to experience interactive demonstrations of the partnered technology.
Targa Resources to buy Atlas Pipeline, Atlas Energy
US pipeline company Targa Resources Corp., the general partner of Targa Resources Partners LP, has agreed to acquire Atlas Energy LP's incentive distribution right, limited partner, and general partner interests in Atlas Pipeline Partners LP.
Targa Resources Partners will acquire Atlas Pipeline Partners for total consideration of $5.8 billion, including $1.8 billion of debt as of September 30, 2014. Each APL common unitholder will be entitled to receive 0.5846 units of Targa Resources Partners and a one-time cash payment of $1.26 per APL common unit for total consideration of $38.66 per APL common unit, based on the closing price of the Partnership's units on October 10, 2014. The partnership will also redeem APL's Class E Preferred Units for an aggregate amount of $126.5 million in cash.
The partnership expects to finance the cash portion of the transaction with borrowings under its revolving credit facility. In connection with the acquisitions, Targa Resources has agreed to reduce its incentive distribution rights for the four years following closing by fixed amounts of $37.5 million, $25 million, $10 million and $5 million, respectively.
Prior to Targa Resources' acquisition of Atlas Energy, ATLS will spin-off its non-midstream assets. After giving effect to the spin-off, ATLS's assets will solely comprise its general partner and incentive distribution rights interests in APL and 5.8 million APL common units. Immediately following the spin-off and subject to the concurrent closing of the partnership's acquisition of APL, Targa Resources will acquire Atlas Energy for total consideration of $1.869 billion, including 10.35 million TRC shares valued at $1.259 billion and $610 million in cash.
Targa Resources has arranged committed financing of $1.1 billion to replace its existing revolving credit facility and to fund the cash components of the transaction, including cash merger consideration and $149 million related to change of control payments.
The combination creates a large midstream franchise with increased scale and geographic diversity in key producing basins in the US, and creates one of the largest diversified MLPs on an enterprise value basis. Notably, the combination introduces positions in the Woodford/SCOOP, Mississippi Lime, and Eagle Ford plays. Additionally, the deal is poised to boost processing capacity across the Permian Basin to 1,439 MMcf/d across 10,250 miles of pipelines.
Standard & Poor's Ratings Services placed the 'B+' corporate credit and senior unsecured ratings on Atlas Pipeline Partners LP on CreditWatch with positive implications.The firm revised the CreditWatch listing on the 'B' corporate credit and senior secured ratings on Atlas Energy LP to developing from negative. It placed its 'BB+' corporate credit and senior unsecured debt ratings on Targa Resources Partners LP on CreditWatch with positive implications.
"In our view, the transaction complements Targa's core competencies in the gathering and processing business, enhances its asset position in the Permian Basin, and expands its operating footprint to attractive regions such as the Anadarko Basin and Eagle Ford Shale. Pro forma for the transaction, we expect fee-based arrangements to represent about 60% of the partnership's operating margins and that Targa will continue to manage its commodity risk in a disciplined manner," the agency noted.
EnLink Midstream to acquire Gulf Coast pipeline systems
The EnLink Midstream group of companies, through a subsidiary of the partnership, signed a definitive agreement with Chevron Pipe Line Company and Chevron Midstream Pipelines LLC to acquire Gulf Coast natural gas pipeline assets including the Bridgeline system predominantly located in Southern Louisiana for $235 million. The natural gas assets include approximately 1,400 miles of natural gas pipelines spanning from Beaumont, Texas to the Mississippi River corridor and approximately 11 bcf of working natural gas storage capacity in Southern Louisiana. The assets to be acquired include the Bridgeline System, with approximately 985 miles of natural gas pipelines in Southern Louisiana with a total system capacity of approximately 920,000 MMcf/d; the Sabine System with approximately 150 miles of natural gas pipelines in Texas and Southern Louisiana with a total capacity of approximately 235,000 MMcf/d; the Chandeleur System with approximately 215 miles of offshore Mississippi and Alabama pipelines with a total capacity of approximately 330,000 MMcf/d.
Rimrock Midstream to construct Platte River Gathering System
Dallas, TX-based Rimrock Midstream LLC has entered into agreements with producers to construct and operate over 150 miles of crude oil trunkline gathering and associated infrastructure in Weld County, Colorado. The Rimrock Platte River gathering system will deliver significant volumes to the Grand Mesa Pipeline's origin point located in central Weld County, Colorado. The gathering will be capable of delivering multiple grades of crude oil.
Enterprise to build infrastructure to serve Delaware Basin
Enterprise Products Partners LP plans to construct a new cryogenic natural gas processing plant in Eddy County, NM and associated natural gas and natural gas liquid (NGL) pipeline infrastructure to facilitate growing production in the Delaware Basin.The assets are expected to begin operations in 1Q16. The South Eddy natural gas processing plant will have an initial capacity of 200 MMcf/d of natural gas, with the potential for future expansions. Completion will bring Enterprise's total natural gas processing plant capacity in the Delaware Basin to 400 MMcf/d. Enterprise plans to construct approximately 80 miles of natural gas gathering pipelines to complement its existing 1,500 miles of natural gas pipelines located in the Delaware Basin. Enterprise will also build a 75-mile, 12-inch diameter NGL pipeline to transport NGLs from the South Eddy plant to the company's Hobbs NGL fractionation and storage facility in Gaines County, TX. Through the connection at Hobbs, customers will have access to Enterprise's integrated network of pipelines linking them to the company's NGL fractionation and storage complex in Mont Belvieu, Texas. Additionally, Enterprise plans to construct pipelines to deliver residue gas from the South Eddy plant to multiple third party pipelines.
Meritage brings natural gas processing plant onstream in PRB
Meritage Midstream Services II LLC has completed and brought onstream its new natural gas processing plant, 50 Buttes, located in Campbell County, WY, to serve natural gas producers in the Powder River Basin. The 50 Buttes plant has an initial processing capacity of 70 MMcf/d. Meritage expects to add 70 MMcf/d in processing capacity by late 2015. The plant is large enough to accommodate up to 300 MMcf/d and is supported by long-term acreage dedications. The plant is part of Meritage's Thunder Creek system, which includes more than 700 miles of high- and low-pressure natural gas pipelines, compression facilities, NGL and liquids handling facilities, and natural gas treating and processing facilities. By the end of 2014 the company will complete the construction of another 100 miles of gathering pipeline and will have more than 110 wells connected to the Thunder Creek system.
ICF: expect upward pressure on gas prices
ICF International expects gas prices to firm, but then decline because of continued strong production growth, primarily from the Marcellus shale, stretching from West Virginia through Pennsylvania. Looking farther into the forecast, ICF expects that increased gas exports (in the form of liquefied natural gas and pipeline exports to Mexico), a surge in demand from the petrochemical industry and a continued shift from coal toward gas in the power sector will all place upward pressure on gas prices through the remainder of the decade. As demand growth accelerates, the potential for price volatility will increase.
