November 2018



Feds Allow Atlantic Coast Pipeline Construction to Resume

Federal officials will allow construction to resume on the Atlantic Coast pipeline, weeks after work was halted when a federal appeals court threw out two key permits for the 600-mile (965-km) natural gas pipeline.

The Federal Energy Regulatory Commission (FERC) announced the change in a letter Monday to Dominion Energy, the project’s lead developer.

Pipeline spokesman Aaron Ruby said crews would mobilize immediately to resume construction as authorized.

In August, a three-judge panel of the 4th U.S. Circuit Court of Appeals concluded that a U.S. Fish and Wildlife Service permit was “arbitrary and capricious” regarding its effect on five threatened or endangered species. Last week, the service issued a revised opinion and the National Park Service issued a new permit for crossing the Blue Ridge Parkway.

The pipeline is planned to start in West Virginia and run through parts of Virginia and North Carolina.

A coalition of environmental groups had asked the federal appeals court to review FERC’s approval of the pipeline.

The Southern Environmental Law Center and Appalachian Mountain Advocates petitioned the appeals court on behalf of 13 conservation and environmental groups.

Mountain Valley Pipeline Construction Permit Revoked

The 4th Circuit Court of Appeals voted to vacate a required Clean Water Act permit for the Mountain Valley Pipeline (MVP), which was issued by the U.S. Army Corps of Engineers. 

The unanimous ruling said the Corps lacked the authority to substitute one type of construction for another in its consideration of the natural gas pipeline, which would crisscross rivers and other sensitive aquatic ecosystems hundreds of times between northern West Virginia and southern Virginia.

This decision affects stream and wetland crossings along 160 miles of the route in West Virginia. MVP said it is “evaluating options to understand its ability to continue with construction.”

In June, the Corps suspended its Nationwide 12 permit for MVP for the four major crossings in West Virginia to further evaluate whether the time limitation should apply. Despite the work stoppage in the area affected by the ruling, construction on other phases of the project has continued despite heavy rains and the threat of further court challenges.

MVP said it continues to target a full in-service during the fourth quarter 2019. 

Oryx Midstream Services Announces Successful Open Season  

Oryx Midstream Services announced the successful completion of the open season for a new regional crude oil gathering and transportation system that will provide additional pipeline capacity across the Northern Delaware Basin. 

The system will extend into Carlsbad, Eddy, Lynch and Lea County in New Mexico, near the state line shared with Texas.

Construction on the new system is ongoing and Oryx expects to complete the initial phases of the project in the second half of 2018, with the system expansion expected to be completed in the second quarter of 2019.

The expanded Delaware Basin system will consist of more than 500 miles of new gathering and transportation pipeline with more than 1.5 million barrels of storage capacity. Its eventual throughput capacity will reach about 700,000 bpd. With this expanded reach, Oryx will serve production from every active county in the Delaware Basin, including Loving, Reeves, Ward, Pecos, Winkler and Culberson Counties, Texas.

Upon completion of the system, Oryx’s total Delaware Basin transportation capacity will ultimately exceed 900,000 bpd. The system will provide crude oil quality segregation and batching capabilities through more than 2 million barrels of operational storage capacity to maintain the quality of multiple grades of crude oil streams across the company’s footprint. 

Canada Won’t Appeal Court Ruling Overturning Pipeline Approval

The Canadian government will not appeal a court ruling that overturned its approval of Trans Mountain Pipeline expansion project, Natural Resources Minister Amarjeet Sohi said.

Instead, the government will reinitiate consultations with all 117 indigenous groups that would be affected by the project, he told a news conference.

In August, the Federal Court of Appeal said Ottawa had failed to adequately consider aboriginal concerns.

“We are going to do things differently this time,” said Sohi, adding that he would not impose a time limit on the talks with indigenous groups.

Last month Sohi directed the National Energy Board regulator to conduct a new review of the application to nearly triple the capacity of the pipeline.

Amid increasing protests by aboriginal and environmental activists, the government bought the pipeline in August from Kinder Morgan Canada Ltd.

Crude Oil Service to Begin on Epic NGL Pipeline in 2019

Epic Midstream Holdings obtained all required approvals for its subsidiary Epic Crude Oil Pipeline, through a lease arrangement, to begin crude oil service on a portion of the Epic NGL Pipeline, once construction is completed in the third quarter of 2019.

Because of high customer demand for crude oil transportation, EPIC made the decision to use the third and final phase of its Epic NGL Pipeline from Crane to Corpus Christi, Texas, for crude oil service while its crude oil pipeline and NGL fractionator remain under construction. The NGL Pipeline will convert back to NGL service by January 2020.

The portion of the NGL line being placed into crude service will originate in Crane with an additional injection point in Wink, Texas, and will have multiple terminal and refinery connections in Corpus Christi and Ingleside. The 24-inch NGL line will have a capacity of 400,000 bpd for its interim crude service. The construction of the final phase of the EPIC NGL Pipeline is progressing on time with three contractors working on the project over five spreads of the pipeline path.

Because of its commercial success, EPIC will upsize its pipeline from a 24-inch line to a 30-inch line, expanding its Permian Basin capacity to 600,000 bpd. With the installation of additional pumps and storage, EPIC can increase the 30-inch capacity to 900,000 bpd.

The EPIC Crude Oil Pipeline will run side-by-side with the EPIC NGL Pipeline with the crude line expected to be completed by January 2020.

Salt Creek, Noble Midstream to Partner on Delaware Basin Project

Salt Creek Midstream and Noble Midstream Partners have agreed to form a joint venture to build a new 200,000 bpd crude oil pipeline and gathering system in the Delaware Basin in West Texas.

The 95-mile, 20-inch pipeline system will originate in Pecos County with additional connections in Reeves and Winkler counties, providing shippers with access to multiple downstream outlets. Salt Creek and Noble Midstream expect to execute definitive agreements and closing of the transaction by year-end.

Salt Creek said it has already commenced construction of the pipeline, with an expected operational date in the second quarter of 2019.

The project provides access to 200,000 barrels of new crude oil storage with expansion potential to 300,000 barrels. Its development is supported by an average customer acreage dedication term of about 15 years, Salt Creek said.

The project is underpinned by 180,000 dedicated acreage from the venture partners and five other Southern Delaware Basin producers, with available dedications of another 100,000 acres. It includes in-field crude gathering lines and a trunkline to Wink Hub that will provide downstream connectivity for producers in the Southern Delaware Basin.

Salt Creek Midstream was established in Houston last year as a joint venture of ARM Energy Holdings and funds managed by the Private Equity Group of Ares. Noble Midstream is a master limited partnership formed by Noble Energy.

State Dept: Keystone XL Route Would Not Harm Environment 

The U.S. State Department issued an environmental assessment of a revised route for the Keystone XL crude pipeline that concluded it would not harm water or wildlife, clearing a hurdle for the project that has been pending for a decade.

Even if the pipeline spilled crude oil along its revised route through Nebraska, a top concern of environmentalists, there would likely be no impact to groundwater, the nearly 340-page draft review said.

“Prompt cleanup response would likely be capable of remediating the contaminated soils before the hazardous release reaches groundwater depth,” the review said.

Last month, a federal judge in Montana had ordered the State Department to conduct the review of a revised route of the project to consider new information relevant to a permit it issued for the pipeline last year.

The review also said implementing the revised route would have “no significant direct, indirect or cumulative effects on the quality of the natural or human environments.”

U.S. President Donald Trump is eager to see the building of the pipeline, which was axed by former President Barack Obama in 2015 on environmental concerns relating to emissions that cause climate change. P&GJ


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