Higher pricetag for Trans Mountain pipeline
Kinder Morgan increased its cost estimate of the Trans Mountain pipeline expansion from $6.8B CAD to $7.4B CAD. The company attributes the higher project cost to a number of factors including costs associated with the NEB's 157 Conditions and project changes as a result of public feedback such as thicker pipe wall, additional drilled crossings in environmentally sensitive areas and the Burnaby Mountain tunnel. Next steps for the project include arranging acceptable financing and a final investment decision by Kinder Morgan. Construction is set to begin in fall 2017 and the project is expecting an in-service date of late 2019.
MMEX Resources hopes to build $450M refinery in Permian Basin
MMEX Resources Corp., a global energy company focusing on the acquisition, development and financing of oil, gas, refining and infrastructure projects in Texas and South America, plans to build a $450 million, 50,000 barrels per day capacity crude oil refinery in the West Texas Permian Basin, subject to the receipt of required governmental permits and completion of required debt and equity financing.
Located 20 miles northeast of Fort Stockton, Texas, near the Sulfur Junction spur of the Texas Pacifico Railroad, the 250-acre facility intends to utilize its connection to existing railways to export diesel, gasoline, and jet fuels; liquefied petroleum gas; and crude oil to western Mexico and South America. Once completed, the Pecos County refinery will be one of the first oil refineries built in the United States in more than 40 years.
MMEX plans to surround the Pecos County refinery with an additional 250 acres of buffer property and leverage state-of-the-art emissions technologies to yield minimal environmental impact. It also expects to feature closed-in water and air-cooling systems, which will require very little local water resources. Construction is slated to begin in early 2018, following the permitting process, and the facility is projected to begin operations in 2019. The company anticipates the an 18-month construction process.
MMEX purchased the rights to the project from Maple Resources Corp.
Kinder Morgan sells 49% interest in Elba Liquefaction Company
Investment funds managed by EIG Global Energy Partners (EIG) have become a 49% joint venture participant in Elba Liquefaction Company LLC (ELC) which will own 10 liquefaction units and other ancillary equipment to be constructed as part of the Elba Liquefaction Project at Kinder Morgan Inc.'s existing Southern LNG Company LLC, Elba Island LNG facility near Savannah, Georgia.
To acquire its membership interest, EIG has made an upfront cash payment of approximately $385 million, consisting of: a $215 million reimbursement to KMI for EIG's 49% share of prior ELC capital expenditures, excluding capitalized interest; and a payment of approximately $170 million in excess of capital expenditures in consideration of the value created by KMI in developing the project to this stage.
EIG has agreed to fund its share of future capital expenditures necessary to complete construction and commissioning of the liquefaction facility, subject to the terms and conditions contained in the applicable agreements. The total project cost is estimated to be approximately $1.3 billion, excluding capitalized interest.
Initial liquefaction units are currently expected to be placed in service in mid-2018, with final units coming on line by early 2019. In 2012, the Elba Liquefaction Project received authorization from the Department of Energy (DOE) to export to Free Trade Agreement (FTA) countries, and on Dec. 16, 2016, the DOE issued non-FTA export authority. The project is expected to have a total capacity of approximately 2.5 million tonnes per year of LNG for export, equivalent to approximately 350 million cubic feet per day of natural gas.
Barclays acted as the exclusive financial advisor to KMI during this transaction.
Canyon begins construction on gas gathering, processing system in STACK play
Canyon Midstream Partners II LLC (CMP2) has commenced construction of a new natural gas processing facility in Woodward County, Oklahoma (the "Redcliff Plant") and an extensive gas gathering system in Woodward, Dewey, Blaine, and Canadian counties, Oklahoma (the "Redcliff Gathering System"). The new gathering and processing system will serve producers in Oklahoma's STACK play.
When completed in the first quarter of 2018, the Redcliff Plant will provide its customers with 200 million cubic feet per day (MMcf/d) of GSP cryogenic gas processing capacity and access to premium residue gas markets on ANR and Southern Star Central. The Redcliff Gathering System will initially consist of 70 miles of 20" steel trunkline, multiple field compression stations and low-pressure gathering pipelines to deliver gas from producer locations to the Redcliff Plant. The Redcliff Plant will be built to accommodate future expansions which would bring the site's total gas processing capacity to 400 MMcf/d.
CMP2 is a Houston-based company formed to acquire, develop and operate midstream energy companies and assets. CMP2 is backed by $200 million in equity commitments from Kayne Anderson Energy Fund VII and the CMP2 management team.
American Midstream Partners, JP Energy Partners complete merger
American Midstream Partners LP and JP Energy Partners LP have completed the previously announced merger.
At a special meeting of JP Energy unitholders held on March 7, 2017, a majority of the JP Energy unitholders other than certain affiliates voted in favor of the agreement governing the merger.
Immediately prior to the completion of the merger, the general partner of JP Energy merged with the general partner of American Midstream with the general partner of American Midstream continuing in its current form.
Upon market open, JP Energy will cease to be a publicly-traded partnership and its common units will now trade on the New York Stock Exchange under the ticker AMID.
Each JP Energy common unit and each JP Energy subordinated unit not held by Magnolia Infrastructure Holdings LLC, were converted into 0.5775 American Midstream common units, and each JP Energy common unit and each JP Energy subordinated unit held by the Affiliated Holders were converted into 0.5225 American Midstream common units. Based on the JP Energy units outstanding, American Midstream issued approximately 20.2 million of its common units to existing JP Energy unitholders.
The combined company will be headquartered in Houston, TX and managed by the existing American Midstream general partner, Board of Directors and executive leadership. Lynn L. Bourdon will serve as the company's chairman, president, and CEO and Eric T. Kalamaras will serve as CFO of the partnership.
Locke Lord represented American Midstream Partners LP in the merger. The combined partnership has an estimated enterprise value of $2 billion and creates a diversified midstream business operating in leading North American basins, including the Permian, Gulf of Mexico, Eagle Ford, East Texas and Bakken.
Lucid Energy Group completes $585M in revolving credit financing
Midstream provider Lucid Energy Group has completed the refinancing and expansion of its two senior revolving credit facilities. The additional financing will be used to support Lucid's growth strategies in the Midland and Delaware basins. Based in Dallas, Lucid is backed by more than $860 million in growth capital commitments from EnCap Flatrock Midstream. Lucid is the largest privately held natural gas processor working in the Permian Basin with more than 660 million cubic feet of natural gas processing capacity and pipeline assets exceeding 3,300 miles in operation. The new credit facilities bring Lucid's total financing to more than $1.45 billion.
Wells Fargo served as sole bookrunner, administrative agent and joint lead arranger alongside Cadence Bank in a $235 million facility supporting Lucid's operations in the Midland Basin. Wells Fargo was the sole lead arranger and sole bookrunner with Cadence Bank and BBVA Compass serving as co-syndication agents in a $350 million facility supporting Lucid's operations in the Delaware Basin.
Locke Lord LLP served as counsel to Lucid. Vinson & Elkins LLP represented Wells Fargo as the administrative agent for a syndicate of 13 banks.
Enterprise acquires Azure Natural Gas Gathering System
An affiliate of Enterprise Products Partners LP has executed a definitive agreement to acquire the midstream business and assets of Azure Midstream Partners LP and its operating subsidiaries in East Texas and North Louisiana. The agreement was the result of Azure's bankruptcy auction proceedings, which Enterprise won with a bid price of $189 million. The United States Bankruptcy Court for the Southern District of Texas entered an order approving the sale by Azure to Enterprise's affiliate on March 15, 2017.
The assets include over 960 miles of natural gas gathering pipelines, three natural gas processing facilities with an aggregate capacity of approximately 210 million cubic feet per day and two 10,000 barrel per day NGL pipelines. These assets are located in Panola, Harrison, Angelina, Shelby, San Augustine, Sabine, Nacogdoches and Rusk counties, Texas and DeSoto and Caddo parishes, Louisiana. The system serves production from the Haynesville shale, Bossier, Cotton Valley and Travis Peak formations.
This transaction is subject to customary regulatory approval and closing conditions. Enterprise expects to close the transaction as soon as practicable after such regulatory approvals and closing conditions have been satisfied, which is expected to occur as early as April, 2017.
Andrews Kurth Kenyon LLP acted as legal advisor to Enterprise in connection with the transaction.
M2, TransCanada to pursue crude oil storage at Cushing
M2 Infrastructure LLC has entered into a Memorandum of Understanding with TransCanada Corp. to pursue construction of 6.2 million barrels of new crude oil storage at TransCanada's terminal in Cushing, Oklahoma.
The storage will be owned by M2 Infrastructure and operated by TransCanada. M2 Infrastructure has an option to build up to 20 million barrels of storage, which would be built in subsequent phases. Construction is expected to begin in late 2017.
Macquarie Capital has been engaged by M2 Infrastructure to serve as financial advisor on the project.
