Port Bureau Updates
Targa Resources and Williams Announce New NGL Agreements for New Pipeline Projects
Targa Resources Corp (“Targa”) and Williams recently announced new natural gas liquids (“NGL”) agreements and NGL pipeline projects that will link the Conway, Kansas, and Mont Belvieu, Texas, NGL markets.
Williams will build a 188-mile NGL pipeline, called the “Bluestem Pipeline,” from its fractionator in Conway, Kansas, and the southern terminus of Overland Pass Pipeline to an interconnect with Targa’s Grand Prix NGL Pipeline (“Grand Prix”) in Kingfisher County, Oklahoma. Targa will construct a 110-mile extension of Grand Prix from southern Oklahoma into the Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties) (“STACK”) region of Central Oklahoma where it will connect with Williams’ new Bluestem Pipeline.
“We are very pleased to be working with Williams to enhance market access for NGLs,” said Joe Bob Perkins, chief executive officer of Targa. “The further expansion of our Grand Prix NGL Pipeline into the STACK is an attractive extension of a highly strategic asset for Targa and will direct significant incremental NGLs over the long-term from Williams and other third parties to Grand Prix and to our downstream assets in Mont Belvieu and Galena Park.”
Targa’s Grand Prix extension will have an initial capacity of approximately 120,000 barrels per day and is expected to cost approximately $200 million. Targa and Williams are targeting an in-service date of first-quarter 2021 for both the Grand Prix extension and the new Bluestem Pipeline, respectively. As part of the project, Williams also plans to expand the DJ Lateral of the Overland Pass Pipeline and make improvements at its Conway NGL Storage facility. Williams expects its investment in these NGL logistics projects to be $350 million to $400 million.
Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent midstream energy companies in North America.
Inchcape Shipping Services expands with acquisition of V-Ships Agency Business
Inchcape Shipping Services, a port agency and marine services company, announced the acquisition of V.Ship’s global port agency business. In a reciprocal agreement V. Group has acquired Inchcape’s Global Marine Travel.
The acquisition of V.Ships Agency business establishes a partnership between the world’s largest ship manager and the world’s leading port agent. Inchcape will offer a full scope of agency services to V.Ships Agency’s customers across its unparalleled global network.
“I’m delighted with our acquisition of V.Ships Agency business. This deal enables us to drive value for our customers by working in partnership with V.Group, delivering enhanced service across our global network. Compliance, scale and transparency are at the heart of this partnership and will continue to be fundamental to our business and our customers.” said Frank Olsen, CEO, Inchcape Shipping Services.
Kirby Signs Agreement to Purchase Cenac Marine Services Fleet
Kirby Corporation (“Kirby”) announced in January the signing of a definitive agreement to acquire the marine transportation fleet of Cenac Marine Services, L.L.C. (“Cenac”) for approximately $244 million in cash, subject to certain closing adjustments. Cenac’s fleet consists of 63 30,000-barrel inland tank barges with approximately 1.9 million barrels of capacity, 34 inland towboats, and 2 offshore tugboats. The closing of the acquisition is expected to occur late in the first quarter of 2019.
David Grzebinski, Kirby’s president and chief executive officer, commented, “The acquisition of Cenac’s young fleet of well-maintained inland tank barges and modern boats is an ideal complement to Kirby’s operations. The addition of these vessels to Kirby’s fleet will not only further reduce our average age profile, but will also further enable us to avoid significant capital outlays for new vessels in the future.”
Enterprise Begins Service on Shin Oak NGL Pipeline
Enterprise Products Partners L.P. announced that its Shin Oak natural gas liquids (“NGL”) mainline is now in service from Orla, Texas in Reeves County to its NGL fractionation and storage complex at the Mont Belvieu hub. The 24-inch diameter pipeline has an initial capacity of approximately 250,000 barrels per day (“BPD”) and provides takeaway capacity for growing NGL production from multiple basins, including the Permian, where NGL volumes are projected to nearly double within the next three years.
Completion of the related 20-inch diameter Waha lateral is scheduled for the second quarter of 2019. Supported by long-term customer commitments, the Shin Oak project will ultimately provide up to 550,000 BPD of capacity, which is expected to be available in the fourth quarter of 2019.
“The Shin Oak Pipeline represents another important addition to our expanding network of integrated midstream assets in the Permian Basin,” said A.J. “Jim” Teague, chief executive officer of Enterprise’s general partner. “Shin Oak provides not only a much needed takeaway option for NGLs, but facilitates growing production of other hydrocarbons in one of the most prolific producing areas in the world, and gives producers access to the most attractive domestic and global markets.”
Once the pipeline infrastructure is fully complete, NGLs for Shin Oak will be sourced primarily from Enterprise’s Orla natural gas processing complex, which began operations in 2018, as well as dedicated acreage from the Alpine High development. A third train at Orla is on schedule to begin service in the second quarter of 2019, followed by Enterprise’s Mentone natural gas processing plant, expected to commence service in the first quarter of 2020. These facilities will give Enterprise more than 1.6 billion cubic feet per day of natural gas processing capacity and over 250,000 BPD of NGL production capabilities in the Permian Basin.
Complementing Enterprise’s Permian Basin assets is the addition of NGL fractionation capacity at its Gulf Coast facilities. The projects are expected to increase the partnership’s system wide fractionation capacity to approximately 1.5 million BPD by the second quarter of 2020.
$4B Needed By U.S. Ports for Security
In the latest report in its “The State of Freight” infrastructure series, U.S. member ports of the American Association of Port Authorities (AAPA) identified nearly $4 billion in crucial port and supply chain security needs over the next 10 years. That funding level is what’s needed to maintain and upgrade America’s port facilities and ensure they are properly equipped to address new and evolving security challenges.
“The State of Freight IV” is the fourth report in as many years, conducted by AAPA, to highlight the needs of America’s deep-draft commercial public ports to effectively move goods into and out of their facilities by land and water. This latest report recommends refocusing the Federal Emergency Management Agency’s Port Security Grant Program (PSGP) to better meet the security infrastructure needs of publicly-owned commercial seaports and related maritime operations. This includes funding an estimated $2.62 billion in maintenance and upgrades to port security equipment and systems, and another $1.27 billion for investments to tackle cybersecurity, active shooter, drone mitigation, resiliency and other evolving security threats.
Currently, the U.S. government invests $100 million annually in the PSGP to protect resources that account for more than a quarter of the American economy, which is the annual value of cargo and passenger activities attributed to our nation’s ports. While the return on investment is impressive, security challenges at ports keep changing. Since the grant program was initially authorized after 9/11, America’s population has increased about 15 percent, with a pronounced population shift to metropolitan areas, and in many cases near port authority freight and passenger facilities. By the end of 2017, container volumes through these facilities had increased 71 percent and total foreign trade tonnage had increased 37 percent, while cruise passenger traffic nearly doubled.
AAPA president and CEO Kurt Nagle remarked: “In The State of Freight IV, we took a deep-dive to better understand the future security challenges of U.S. ports, the communities that surround them and the supply chains that serve them. Not only did we find that Port Security Grant Program appropriations need to increase four-fold to $400 million a year, but the ratio of grant funds going to ports needs to at least double to 50 percent to properly mitigate for security threats.
“Protecting our nation’s seaports against terrorism and other security threats helps ensure safe and reliable goods movement, which is critical to our economy. However, in recent years, nearly two-thirds of Port Security Grant Program funding has been spent on training and equipping first responders, and on improving response capabilities.
Harris County Flood Control District Receives Federal Grant Award Letter for Stormwater Tunnel Feasibility Study
Harris County Flood Control District has received an award letter from the U.S. Economic Development Administration (EDA) in connection with a $400,000 feasibility investigation of large-diameter, deep underground stormwater conveyance tunnels.
Once Harris County Commissioners Court has accepted the $320,000 grant – to be matched by $80,000 in local funds provided through the 2018 Bond Program – the four-month investigation is expected to get underway in 2019. It will assess the potential for stormwater tunnels to help drain or increase the capacity of existing bayous and drainage channels in Harris County.
The feasibility investigation will include a review of soil and groundwater conditions, as well as other geotechnical, geological and environmental assessments. Developing better cost information for tunnel construction in our area, based on these preliminary findings, will be part of this study.
A feasibility study is an early step in the lifecycle of a flood damage reduction project. In the case of the Stormwater Tunnel Feasibility Study, the study would examine whether this technology is even possible in our area, which is characterized by soft soils and a high groundwater table. We will be looking at our soil and water table conditions and compare those to the technology that exists in the tunnel construction industry to ensure there is a fit.
If the use of tunnels is found to be feasible, future effortscould examine potential tunnel routes, complete hydraulic analyses to determine the required tunnel diameters, and determine proposed inlet and outlet shaft locations.
In this concept, tunnels would collect stormwater at upstream locations along the bayous, convey the stormwater downstream via gravity in deep underground tunnels measuring 20 feet or more in diameter, and discharge the stormwater into the Houston Ship Channel at a safe location. The goal would be to significantly reduce flood risks in Harris County watersheds where tunnels could be constructed.
While costly, tunnels have been employed to carry stormwater in other locations in Texas and nationwide as an alternative to traditional stormwater conveyance improvement projects. Tunnels can utilize existing public rights-of-way – such as roadway corridors – and with relatively little disruption to developed urban areas, which helps to reduce cost. Cost per mile may vary widely – between roughly $40 million and $163 million per mile for projects in San Antonio, Dallas and Austin – depending on soil conditions and other factors. Tunnels typically are constructed using tunnel boring machines, at a depth of from 100 to 150 feet.
The 2018 Bond Program includes a total of $20 million for preliminary engineering in connection with the tunnel concept.could examine potential tunnel routes, coconcept.
Chevron to buy Pasadena refinery from Petrobras
Chevron Corp announced it is buying a refinery Pasadena Refining System Inc in Pasadena, Texas, from Brazilian state oil company Petrobras for $350 million.
In addition to the 110,000-barrel-per-day (bpd) refinery, Chevron will take ownership of a 466-acre (188.5 hectares) complex on the Houston Ship Channel that includes storage tanks with capacity for 5.1 million barrels of crude oil and refined products, as well as 143 acres of additional land, the company said.
“This expansion of our Gulf Coast refining system enables Chevron to process more domestic light crude, supply a portion of our retail market in Texas and Louisiana with Chevron-produced products, and realize synergies through coordination with our refinery in Pascagoula,” said Pierre Breber, executive vice president of Chevron downstream & chemicals.
Once approved by regulators, the acquisition will become the second Gulf Coast refinery operated by Chevron and its only one in Texas.
- Date March 19, 2019
- Tags 2019 February