December 2024, Vol. 251, No. 12
Features
Revisiting the Biggest Midstream Stories of 2024
By Pipeline & Gas Journal Staff
(P&GJ) – In this final issue of P&GJ for 2024, the staff – with more than a little help from our readers – takes a look back at the sometimes-frenzied year for pipeline construction that was 2024.
As was the case during the previous 12 months, this year brought its own share of anxiety, as we in the energy industry worked to adjust to the ongoing global demand for natural gas, changes to regulations and the growing trend toward mega-mergers and acquisitions.
We also had a year got to contemplate the fallout from the recently completed presidential election and what that might mean to projects going forward.
Our compiled list of Top 10 stories was based largely on our website readership numbers throughout the year, along with staff suggestions.
1. DeLa Express Targets 2028 Launch for Permian-to-La. Pipeline. (April)
DeLa Express LLC, an affiliate of Moss Lake Partners, has formally requested approval that Federal Energy Regulatory Commission (FERC) initiate the pre-filing review process for the proposed DeLa Express Project.
The ambitious project, a 690-mile, 42-inch natural gas mainline, would connect production sites in the Delaware Basin, Texas, to markets in and around Lake Charles, Louisiana. It would also establishment of five lateral pipelines, eight compressor stations, multiple meter stations, and related facilities. The DeLa Express is expected to provide 2 Bcf/d of capacity.
Update: The company is targeting a 2028 in-service date, with a certificate application anticipated for February 2025 and construction starting by June 2026.
2. Enbridge Picks Contractors for Great Lakes Tunnel Project (April)
Canadian company Enbridge arrived at a joint venture deal between Barnard Construction Company and Civil and Building North America (CBNA) to construct the Great Lakes Tunnel in the Straits of Mackinac.
The 500-foot tunnel will provide a secure pathway for Enbridge’s Line 5 pipeline, which transports crude oil and natural gas liquids from Superior, Wisconsin, through Michigan’s Upper and Lower Peninsulas, before reaching its final destination in Sarnia, Ontario, Canada.
The project has been driven by environmental concerns over the pipeline’s current underwater crossing in the Straits of Mackinac, which is laid on the lakebed, near shipping routes.
Enbridge will finance the project entirely, and upon its completion transfer, ownership and operation to the MSCA.
Update: The U.S. Army Corps of Engineers (USACE) has indicated it will render a permitting decision in early 2026. Enbridge expects the project to start in 2026 and take about two years to complete.
3. Court Blocks Williams’ $1 Billion, 5-State Gas Pipeline Project (July)
A U.S. appeals court tossed out a federal regulator’s approval of a new $1 billion natural gas project running through five mid-Atlantic states, calling it “arbitrary and capricious.”
Circuit Judge J. Michelle Childs wrote for a three-judge panel that FERC should have better assessed the risk of significant greenhouse gas emissions, and how the Williams unit might reduce them and did not properly review public interest.
Williams said it will address the court’s concerns.
About three-quarters of the potential 3 million gas customers from the proposed project would go to New Jersey customers, with the rest going to Delaware, Maryland, New York and Pennsylvania.
Update: In September, Williams filed for a temporary emergency certificate to continue operating the portion of the project that was placed in-service on an interim basis in October of 2023.
4. Enbridge’s Pipeline Investments Include Gray Oak Expansion (March)
Enbridge announced plans to expand capacity on its Gray Oak oil pipeline by 80,000 bpd this year and could add an additional 40,000 bpd in 2025, the company said.
Enbridge originally planned to add 200,000 bpd to the Texas pipeline, but in February revised downward that target to between 100,000 bpd and 200,000 bpd.
The 850-mile Gray Oak pipeline runs between the Permian basin in West Texas and Corpus Christi, Texas, on the Gulf Coast. Enbridge’s Ingleside Energy Center there is the largest crude oil storage and export terminal by volume in the U.S.
Enbridge said it is not concerned about potential competition at the Corpus Christi hub, where Enterprise Products Partners is trying to secure licensing for its Sea Port Oil Terminal (SPOT) export project.
Update: Following a successful open season that ended in late June, the company said it expected the expansion to be fully in service by mid-2025.
5. Williams Begins Louisiana Pipeline Construction Despite Legal (July)
Williams kicked off construction of its Louisiana Energy Gateway natural gas pipeline, aimed at transporting gas from the Haynesville shale field to the Gulf Coast, despite ongoing disputes with Energy Transfer.
The LEG pipeline will have a capacity of 1.8 Bcf/d and will transport natural gas from the Haynesville shale basin to LNG export facilities on the U.S. Gulf Coast. The project is now expected to be in service by the second half of 2025, pushed back from the original late 2024 target.
The legal conflict between Williams and Energy Transfer began in late 2023 over allegations that Energy Transfer had obstructed multiple projects, including Williams’ Louisiana Energy Gateway System. These centered on Energy the company’s refusal to allow access to its pipelines, which was seen as an attempt to monopolize pipeline infrastructure and impede competitors.
Update: In September, FERC rejected Energy Transfer’s bid to halt LEG construction, ruling that the pipeline is not subject to FERC jurisdiction as it serves a gathering function Williams began pre-construction activities along the right-of-way in late July and is now proceeding with full construction.
6. Trans Mountain Pipeline Begins Operations After Years of Delays (May)
Finally, after 12 years, Canada’s Trans Mountain pipeline expansion project (TMX) began commercial oil shipments.
Pipeline constraints had forced Canadian oil producers to sell oil at a discount for many years, but TMX nearly triples the flow of crude from landlocked Alberta to Canada’s Pacific coast to 890,000 bpd.
The expanded pipeline was first proposed by Kinder Morgan in 2012. The Canadian government bought it in 2018 to ensure the project got built despite opposition, but construction has been marred by regulatory delays and costs soaring to more than four times the project’s original budget.
The completion prompted TD Securities to forecast a record high of about 5.3 MMbpd this year, according to TD Securities, as producers increase.
7. YPF Green Lights Pipeline Project to Spur Vaca Muerta Exports (May)
Argentina oil and gas producer PF SA advanced plans for a $2.5-billion cross-country pipeline project, aimed at tapping into the rich potential of the Vaca Muerta shale region.
The Vaca Muerta Sur pipeline signifies a notable step forward for YPF in its efforts to support crude oil exports from the expansive shale reserves in Patagonia.
The proposed 326-mile (525-km) pipeline, spanning from Neuquén province to Punta Colorada, is projected to play a pivotal role in evacuating crude from the heart of the shale region to loading terminals. With an anticipated capacity of 180,000 bpd day by 2026, the project holds the promise of unlocking substantial value from Vaca Muerta’s crude resources.
The Vaca Muerta Sur pipeline is poised to address the primary bottleneck hindering the full exploitation of Vaca Muerta’s immense potential. Often likened to the Permian Basin in the United States, Vaca Muerta has long awaited the necessary infrastructure to unleash its full capacity.
8. West Virginia Greenlights Hope Gas’ $177 Million Pipeline (January)
West Virginia’s Public Service Commission (PSC) gave the green light to Hope Gas’ proposal for constructing a new pipeline to cater to the Morgantown area. The 30-mile, $177 million pipeline, will run from Wadestown to Morgantown and then northwest to Osage.
The PSC granted a certificate of public convenience and necessity for the Morgantown Connector Project (MCP), aligning closely with Hope’s submitted order on Dec. 21.
The PSC’s approval for the 16-inch pipeline comes as Hope faces a decline in supply capacity beyond peak-day requirements, with local customers in the Morgantown area expressing a need for increased supply levels. Hope’s solution involves entering into a 15-year contract with Columbia Gas, aiming to establish a new interconnection near Wadestown.
Hope planned to start construction this winter in order to meet the demand for the 2025 winter season.
9. Blackcomb Permian-to-Gulf Coast Pipeline Gets Go-Ahead (July)
WhiteWater, MPLX, Enbridge and Targa Resources finalized plans for the Blackcomb Pipeline, set to enhance natural gas transportation from the Permian Basin to the Gulf Coast.
The decision followed the successful securing of firm transportation agreements with major shippers, including Devon Energy, Diamondback Energy, Marathon Petroleum, and Targa Resources.
The Blackcomb Pipeline will span 365 miles and have a capacity of up to 2.5 Bcf/d. It will connect gas production sites in the Permian Basin to the Agua Dulce area in South Texas, drawing from multiple upstream sources such as gas processing facilities in the Midland Basin and the Agua Blanca Pipeline.
The pipeline project, with WhiteWater managing construction and operations, is expected to be operational in the second half of 2026, pending regulatory approvals. Blackcomb Pipeline is 70% owned by WPC, 17.5% by Targa and 12.5% by MPLX.
10. Summit Carbon Pipeline Approved for Construction in Iowa
Summit Carbon Solutions received a construction permit to build, maintain and operate the Midwest Carbon Express, a 688-mile portion of a pipeline in Iowa, spanning 29 counties in Iowa.
In all, the ambitious project would span 2,100 miles across the states of Iowa, Minnesota, North Dakota, South Dakota and Nebraska.
The line would cross five states and capture emissions from 57 ethanol plants. Summit wants to break ground next year and begin operations in 2026.
The Iowa Utilities Board (IUB) conducted an extensive review process over 34 months, including 33 public meetings and receiving about 50,000 pages of testimony and exhibits.
On June 25, the IUB issued its final decision, granting Summit Carbon the right to proceed with the pipeline project. The Board determined that the project would serve the public convenience and necessity, allowing Summit Carbon to exercise eminent domain over 859 parcels.
Update: The project was dealt a serious blow in October when a South Dakota court upheld the rejection of the carbon capture project in that state and said Summit does not have the right to evoke eminent domain to seize property. Summit said it will continue to fight for the project.
Top Midstream Transactions of the Year
1. Energy Transfer adds 6,000 Miles of pipeline with WTG Midstream acquisition. The $3.25 billion deal included the 6,000-mile of pipeline network that serves the Midland Basin, eight processing plants with a total capacity of 1.3 Bcf/d, and two new plants that are under construction.
2. EQT and Equitrans Midstream to merge. Top U.S. natural gas producer EQT Corp. said it agreed to buy Equitrans Midstream in an all-stock deal that values its former pipeline unit at about $14 billion, including debt.
3. Bernhard Capital Partners (BCP) purchases New Mexico Gas Company (NMGC). BCP agreed to acquire NMGC from Emera Inc. in a transaction valued at $1.25 billion, including the assumption of $500 million in debt. This deal involves over 12,000 miles of transmission and distribution pipelines serving more than 545,000 customers.
4. Enterprise Products Partners acquisition of Piñon Midstream. Enterprise Products Partners agreed to acquire Piñon Midstream, which owns about 50 miles of natural gas gathering and redelivery pipelines in the Delaware Basin. The transaction value was not disclosed.
5. Williams Companies acquisition of Discovery Producer Services.
Williams completed the transaction of an additional 40% stake in Discovery Producer Services LLC for $170 million. This gives Williams full ownership of the Discovery Pipeline System, a 219-mile natural gas pipeline extending from the Outer Continental Shelf to a gas processing plant in Louisiana.
6. Chesapeake Energy and Southwestern Energy merger. While not exclusively pipeline-focused, the deal, which created Expand Energy Corporation, the largest independent natural gas producer in the United States, will have implications for midstream assets.
7. Sunoco acquires fuel storage and pipeline operator NuStar Energy. The deal, valued at $7.3 billion, helps the company diversify its core business beyond distribution of motor fuels. NuStar provides exposure to crude terminals and pipelines, refined products terminals and pipelines, a large ammonia pipeline, and exposure to the West Coast and Midwest.
Top Non-Midstream News (Top Among P&GJ Readers):
1. U.S. House Passes Bill to Reverse Biden’s LNG Pause (February)
A bill to strip the power of the administration to freeze approvals of LNG exports passed in the Republican-controlled U.S. House of Representatives but faced an uphill battle in the Senate.
The bill would take away the authority to approve the exports from the Department of Energy (DOE), leaving the Federal Energy Regulatory Commission (FERC) as the sole body approving LNG projects.
President Joe Biden halted the approvals in late January for exports to big markets in Europe and Asia in order to consider environmental and economic impacts of the fast-growing business. The U.S. became the largest LNG exporter in 2023, and its exports are expected to double by the end of the decade.
Update: Though the bill stalled in the Senate, a U.S. district court ruled that the DOE freeze would be "stayed in its entirety, effective immediately.” In effect, the ruling achieved the intent of the bill and required that the administration to resume processing applications.
2. Mexican President: Billionaire Interested in Pemex Project (June)
Mexico’s President Andres Manuel Lopez Obrador announced that billionaire businessman Carlos Slim was interested in participating in the country’s first deepwater natural gas project, working alongside state energy company Pemex.
Two months prior, Reuters said the two parties had discussed methods to revive development of the Lakach field in the Gulf of Mexico and other potential partners were also approached.
The Lakach field is located about 60 miles (98 km) southeast of Veracruz and is estimated to hold 900 Bcf of gas.
Pemex wants to develop the offshore field using a service contract in which partners would finance projects up front, a method that was used prior to the Mexico’s energy sector reforms that opened it to private participants.
Update: By July, Slim’s company Grupo Carso SAB had agreed to a deal with Pemex to explore and extract from the Lakach field. Grupo Carso committed to investing $1.2 billion in the project. The agreement stipulates that Pemex will own the field and its reserves, while Grupo Carso will build an inland facility to store and process the gas and condensates.
3. Construction Outlook: New LNG Terminals Sound Beckon Call for More Pipelines (January).
With global thirst for LNG driving the market, the global pipeline market remained reasonably strong, particularly for exporters in the U.S. Permian and Haynesville regions, and those on the receiving end, such as India.
4. Mexico Orders Seizure of Hydrogen Plant at Pemex Refinery (February).
Mexico's government ordered the expropriation of a hydrogen plant at a Pemex oil refinery, which had been that sold to French company Air Liquide during the previous administration. The Energy Ministry announcement cited “public good” and risk to motor fuels production by state-operated Pemex due to the third-party supply.
Update: The decree calls on Pemex to compensate Air Liquide, though the amount was not specified. This seizure represented a significant shift in Mexico's energy policy, emphasizing state control over key industrial assets.
5. (tie) Biden Says Enbridge Pipeline Shutdown Order Should Be Reconsidered (April).
The Biden administration asked that a federal appeals court to request that a lower court reconsider its order that would make Enbridge to drain part of an oil pipeline crossing Native American land in Wisconsin.
The U.S., which is not a party to the case, said the lower court was correct in the portion of the finding that Enbridge trespassed on tribal land. Enbridge said shutting down the 540,000 bpd pipeline by 2026, as ordered, would not be in the public interest.
Update: Enbridge later proposed a $450 million plan to reroute the pipeline around the Bad River reservation, which is undergoing environmental review by the Army Corps of Engineers. The pipeline continues to ship oil.
5. (tie) EnCap Eyes $5 Billion Sale of Bakken Shale Producer Grayson Mill (January)
EnCap Investments sold Grayson Mill Energy’s Williston Basin business to Devon Energy for $5 billion. The deal structure, which included $3.25 billion in cash and $1.75 billion in stock, closed in the third quarter of 2024.
The acquisition significantly expands Devon’s presence in the Williston Basin, adding 307,000 net acres to its portfolio. It will boost Devon’s daily output from 664,000 boepd to 765,000 boepd, making the company the fourth-largest producer in the Williston Basin based on gross operated production.
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