Energy Transfer Signs NGL Transportation, Processing Agreement

(Reuters) — Energy Transfer LP said on Wednesday it signed agreements with an undisclosed company for the gathering, processing, transportation and fractionation of natural gas liquids (NGLs) in the Eagle Ford shale basin through 2034, and the Delaware basin through 2040. 

Discussions with potential shippers to build an offshore crude export facility in Texas capable of handling supertankers were progressing, but a final investment decision has not been made, the company said during its fourth-quarter earnings call.

U.S. crude exports have surged to record highs after Washington lifted a ban in late 2015. A shale boom has helped make the United States the world's largest oil producer, ahead of Saudi Arabia and Russia.

Several midstream companies have raced to add export terminals capable of handling Very Large Crude Carriers (VLCCs) along the U.S. Gulf Coast.

Completion of the Ted Collins crude oil pipeline will provide access to over 1 million barrels per day (bpd) of inbound crude oil for delivery to the Houston and Nederland, Texas terminals as well as to Houston and Gulf Coast refineries, Chief Financial Officer Thomas Long said during the call.

Last year, Energy Transfer said it would buy smaller rival SemGroup Corp for $1.35 billion and build the new Ted Collins pipeline between the Houston Ship Channel and Nederland.

The pipeline will also allow Energy Transfer to fully utilize export capacity at its Houston and Nederland terminals, which it said can be expanded to over 2 million bpd, Long said.

The pipeline is expected to have initial capacity of more than 500,000 bpd, and commercial operations are expected to begin in the second half of 2021.

Energy Transfer said the initial phase of expansion of the Dakota Access pipeline system beyond its current capacity of 570,000 bpd will be based on shippers' existing commitments as well as those made during the current open season.

"We still expect this capacity to serve the commitments received to be in service in early 2021," Long said. "We're confident that through time, we'll get to 1.1 million bpd over the next 4 or 5 years."

Overall crude transportation volumes rose to a record 4.7 million bpd during the fourth quarter compared with about 4.3 million bpd a year earlier, primarily due to volume growth in the Bakken basin and an increase in flows on its Texas pipelines.

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