Lukoil returning investments on West Qurna-2 project in Iraq
A crude carrier chartered by LITASCO (LUKOIL's international marketing and trading arm) arrived Wednesday, July 30, in South Iraq's port of Basra to receive the first batch of oil as part of the recovery of LUKOIL's costs from phase one of the West Qurna-2 project.
The vessel will spend several days in the port to load one million barrels (about 160 thousand tons) of oil. It is the first crude carrier to transport buy-back oil that belongs to LUKOIL in accordance with the terms of the West Qurna-2 Service Contract.
Meanwhile production at West Qurna-2 has reached a level of 280 thousand barrels per day. The project is continuing according to plan with LUKOIL successfully fulfilling its contractual obligations.
"The loading of this crude carrier provides further evidence of the reliable partnership between LUKOIL and the Iraqi side in developing the country's oil industry," said Andrey Kuzyaev, vice president of LUKOIL and president of LUKOIL Overseas.
GP of Summit Midstream to develop new Bakken pipeline interconnect
Epping Transmission Co. LLC, a newly-formed operating subsidiary of Summit Midstream Partners LLC, has reached an agreement with North Dakota Pipeline Company LLC, an affiliate of Enbridge Energy Partners LP, on a new crude oil interconnect agreement pursuant to which Epping Transco will interconnect with and deliver certain of the crude oil gathered on Meadowlark's Polar and Divide systems into Enbridge's North Dakota System (the "Little Muddy Interconnect"). Meadowlark Midstream Co. LLC is an operating subsidiary of Summit Midstream Partners. The Little Muddy Interconnect will provide customers on the Polar and Divide systems with increased optionality in accessing downstream markets with up to 55,000 b/d of incremental pipeline throughput capacity.
In connection with the Little Muddy Interconnect and the Basin Transload interconnect announced in June 2014, Meadowlark will expand its Epping Crude Oil Storage Facility and Divide Crude Oil Storage Facility. Epping Storage will receive crude oil from the Polar and Divide systems and will also include a truck unloading rack. Divide Storage will receive crude oil from the Divide System and will also include a multi-bay truck unloading rack. Epping Storage and Divide Storage will each have 75,000 barrels of crude oil storage capacity, initially, and both facilities will have the ability to accommodate additional crude oil storage tanks for future potential expansions. Both facilities are expected to be in service in 3Q15. Customers of Epping Storage will have the option to access the COLT Hub rail terminal or Enbridge's North Dakota Pipeline System. Customers of Divide Storage will have the option to access the COLT Hub rail terminal, Basin Transload's Columbus rail terminal, or Enbridge's North Dakota System (through Epping Storage).
ONEOK to invest up to $785M to reduce natural gas flaring in North Dakota
ONEOK Partners LP plans to invest approximately $605 million to $785 million between now and the end of 3Q16 to construct a new processing facility and related infrastructure designed to help reduce natural gas flaring in North Dakota.
The investment includes a plan to build a new 200 MMcf/d natural gas processing facility - the Demicks Lake plant - and related infrastructure in northeast McKenzie County, North Dakota, which will process natural gas produced from the Bakken Shale in the Williston Basin. Money will also be used to construct additional natural gas compression to take advantage of additional natural gas processing capacity at the partnership's existing and planned Garden Creek and Stateline natural gas processing plants in the Williston Basin by a total of 100 MMcf/d, and to build approximately 12 miles of NGL gathering pipeline from the Demicks Lake plant to the partnership's existing Bakken NGL pipeline.
Since 2010, ONEOK Partners has constructed or is constructing seven new natural gas processing plants and related natural gas gathering infrastructure in the Williston Basin, which will increase the partnership's natural gas processing capacity in the region by more than 10 times by the end of 2016, compared with 2010.
Demicks Lake
The Demicks Lake natural gas processing plant and related infrastructure are expected to cost approximately $515 million to $670 million and be completed during 3Q16, and include: $330 million to $430 million for the construction of the Demicks Lake natural gas processing plant; and $185 million to $240 million for the construction of related natural gas infrastructure, including natural gas gathering pipelines and natural gas compression. When completed, the Demicks Lake natural gas processing plant will be ONEOK Partners' second 200-MMcf/d plant in the region. In November 2013, the partnership announced plans to construct the Lonesome Creek plant, a 200-MMcf/d natural gas processing facility, expected to be completed in 4Q15.
Natural gas compression
The partnership also will invest approximately $80 million to $100 million to construct additional natural gas compression to take advantage of additional natural gas processing capacity at its Garden Creek, Garden Creek II and III and Stateline I and II natural gas processing facilities by a combined 100 MMcf/d. Completion is scheduled for 4Q15.
NGL gathering pipeline
In addition, the natural gas liquids segment will invest approximately $10 million to $15 million to construct approximately 12 miles of NGL gathering pipeline connecting the Demicks Lake natural gas processing plant to the partnership's Bakken NGL Pipeline scheduled for completion during 3Q16.
PAA to construct pipeline from Cushing to Memphis
Plains All American Pipeline LP will construct the Diamond Pipeline, a 440-mile, 20-inch crude oil pipeline that will provide capacity of up to 200,000 bpd of domestic sweet crude from the Plains' Cushing, OK terminal to the Valero Memphis refinery in Tennessee, and the ability to access Valero Energy Partners' Collierville, Tennessee, pipeline.
The Diamond Pipeline project is underpinned by a long-term shipping agreement with Valero and a related contract for storage and terminaling services at the Plains Cushing Terminal. Valero holds an option until January 2016 to become a partner in the Diamond Pipeline and to purchase a 50% interest. Construction of the pipeline will enhance the refinery's long-term ability to produce gasoline, diesel, and jet fuel for the greater Memphis, Tennessee, and eastern Arkansas area. The total project investment is expected to be $900 million, and it is expected to be completed in late 2016.
BRIEFS
Midstream sector impacts TX economies
Through ongoing operations and construction in 2013 alone, Texas' oil and gas pipeline industry provided $33B in economic impact, supported more than 165,000 high-paying jobs, contributed an additional $18.7B in gross state product, and injected $1.6B in state and local government revenues, according to joint-department study conducted at Texas Tech University, commissioned by the Texas Pipeline Association.
Conservative economic estimates conclude that in the period from 2014-2024, the pipeline industry will contribute over $374B in total economic output, sustain 171,000 high-paying jobs annually, contribute over $212B in additional gross state product, and inject $19.5B billion in state and local government revenues.
PVA sells certain Eagle Ford rights for $150M
Penn Virginia Corp. has sold the right to construct and operate a crude oil gathering and intermediate transportation system covering a portion of its Eagle Ford Shale acreage to Republic Midstream LLC for $150M.
Republic is a JV funded by ArcLight Capital Partners LLC that is managed by American Midstream Partners LP and JP Energy Partners LP.
The oil gathering system and an associated central delivery and blending station will be located in Gonzales and Lavaca Counties, Texas and are expected to be constructed and operational by mid-2015. Penn Virginia will have a minimum committed volume of 15,000 barrels of oil per day for 10 years from the dedicated portion of its acreage.
