January 2021, Vol. 248, No. 1
Editor's Notebook
Happ(ier) Days Are Here Again?
By Michael Reed, Editor-in-Chief
As a rule, I do not consider myself to be much of a bearer of glad tidings, even though I like the idea of good news as much as anyone, if not more.
I suppose a fair amount of my glass-as-half-empty outlook on life comes to me naturally enough, though much of my wariness probably can be traced back to my big city newspaper days, when explosions, mayhem and various catastrophes, both natural and man-made, consumed the bulk of my work day.
Regardless of the reason, in situations that prompt a typical person to offer high-fives and jump for joy, I generally find myself peering toward the sky, looking for that giant falling anvil Wile E. Coyote never sees coming.
Still, even after taking this into account, I find myself sincerely believing that relatively good news is just around the corner for the midstream sector. Not only that … I have some proof – sort of.
For one thing, projections from midstream analysts, of late, have been surprisingly positive, particularly when it comes to their short-term outlook.
Morgan Stanley, for example, recently pointed positively to what it called “a sharp cyclical reflation value rotation” (favorable shift toward midstream investment) in the immediate aftermath of the presidential election. Not only that, their analysts add this shift could represent a “durable” shift for the rest of 2021.
“Midstream stocks have been catalyzed by the prospect of a divided Congress (expectation of more benign tax and energy policy changes) coupled with COVID vaccine progress that should support increased oil and refined product demand,” the researchers explained.
Another positive sign, of course, is that West Texas Intermediate (WTI) prices have bounced back to levels that are above the minimal cost of production in many areas, with investors appearing ready to overlook the risks posed by a supply imbalance.
There is also this decidedly more tangible good news on the pipeline construction front: TC Energy recently awarded about $1.6 billion in contracts for portions of its 36-inch Keystone XL pipeline, with work expected to begin this year.
The companies winning the contracts are Michels of Brownsville, Wis.; Precision Pipeline of Eau Claire, Wis.; Barnard Pipeline of Bozeman, Mo.; Price Gregory International of Katy, Texas; and U.S. Pipeline and Associated Pipeline, both of Houston.
“The selection of our U.S. construction contractors for 2021 is an important next step in employing thousands more American union workers and delivering tangible benefits to local communities and businesses,” said Richard Prior, president of Keystone XL Pipeline, of the contracts.
While the bulk of the details were difficult to come by at press time, according to a statement on its website, Price Gregory will construct 155 miles (249 km) of large-diameter pipeline in Keya Paha, Boyd, Holt and Antelope counties in Nebraska, and Lyman and Tripp counties in South Dakota.
The company expects about 1,200 people to work on the project during the two years of construction period and it committed to hiring locally, with “priority given to qualified local businesses to support its efforts.”
If all goes according to plan, Price Gregory thinks its construction activities will begin near Winner, S.D., in the summer of 2021, finishing up near Norfolk, Neb., in 2022.
“We are proud to put Price Gregory employees to work on completing the pipeline, which is also expected to provide a boost to local economies along the pipeline route, and we look forward to working with TC Energy,” said Robert Bell, president and CEO of Price Gregory.
Additionally, in September, Michels said it is building eight pump stations for the Keystone XL in Montana, South Dakota, Oklahoma and Texas. Michels expects to complete the work during the first quarter of the year.
All in all, it looks like 2021 may be getting off to a better start than any of us probably expected. (Certainly, better than I would have guessed during the summer.)
Now, if we can just avoid those falling anvils, we should be all right.
Comments