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Mountain Valley Is to Be Completed by Equitrans in 2023: Shares Rose
08/19/2022
According to a company release on August 2, U.S. energy company Equitrans Midstream Corp. anticipates finishing the $6.6 billion Mountain Valley natural gas pipeline from West Virginia to Virginia in the second half of 2023.
The company decided to complete this project after the announcement on August 1 that Democratic U.S. Senator Joe Manchin honored a commitment from President Joe Biden, Senate Majority Leader Chuck Schumer, and House of Representatives Speaker Nancy Pelosi to permit the long-delayed Mountain Valley to be finished.
Manchin’s agreement and the announcement increased Equitrans shares by over 10% to a three-month high of $8.72 on August 2.
It is important to notice, that Mountain Valley is the sole big gas pipe under construction in Appalachia and one of some U.S. pipeline projects delayed by regulatory and legal arguments with environmental and local groups. These fights prevent federal permit problems issued during President Donald Trump’s administration.
As Appalachia is the nation's biggest shale gas basin, this project is vital point to unlocking more gas supplies. Equitrans admits that the Mountain Valley venture was engaged in the permitting process with the relevant federal agencies for the outstanding permits required to complete the project.
A few agencies still need to reissue permits, including the U.S. Federal Energy Regulatory Commission, the U.S. Fish and Wildlife Service (Biological Opinion), U.S. Army Corps of Engineers, U.S. Forest Service, and Bureau of Land Management (Right-of-Way across Jefferson National Forest).
Moreover, lots of those permits were dismissed by the U.S. Court of Appeals for the Fourth Circuit and even some more than once.
At the beginning of Mountain Valley construction in February 2018, Equitrans valued the 303-mile (488-km), 2 Bcf/d project would cost approximately $3.5 billion and enter service by late 2018.
Equitrans has said the pipeline was 94% completed. The company has a 48.1% ownership interest in Mountain Valley and will operate the pipeline. Mountain Valley is owned by units of Equitrans, NextEra Energy Inc., Consolidated Edison Inc., AltaGas Ltd., and RGC Resources Inc.
One of the challenges to safe pipeline operations is associated with accidental damage caused by excavation, directional drilling, construction, farming activities, or even homeowners digging in their yards. Equitrans Midstream Corporation (ETRN) helps customers to prevent pipeline emergencies that are caused by accidental damage to the pipeline system.
As part of the commitment to local communities, ETRN has dedicated resources to develop and implement damage prevention initiatives focused on maintaining the integrity of its pipelines and the safety of individuals working in proximity to ETRN’s pipelines and facilities.
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Grand Prix Pipeline Will Be Completely Owned by Targa: To Buy Remaining Stake For $1.05 Billion
On January 3, Targa Resources Corp asserted that it is purchasing the remaining stake for $1.05 billion in cash from BlackstoneInc's energy unit in its Grand Prix NGL Pipeline that it does not already own. Targa, which is going to acquire a 25% stake from Blackstone Energy Partners, purchased 75% interest in the pipeline last year when it repurchased interests in its development company joint ventures from investment firm Stonepeak Partners LP for almost $925 million. The Stonepeak agreement also included 100% interest in its Train 6 fractionator in Mont Belvieu, Texas, and a 25% equity interest in the Gulf Coast Express Pipeline. Grand Prix has the capacity to transfer up to 1 MMbbl/d of NGL to the NGL market hub at Mont Belvieu. The same day Targa maintained the price of the Blackstone Energy Partners agreement, which is anticipated closing in the first quarter of 2023, representing roughly 8.75 times Grand Prix's valued 2023 adjusted EBITDA multiple.
Magellan Reported Volume Changes on Its LongHorn and BridgeTex Pipelines
According to a July 28 report, Magellan Midstream Partners LP stated that the volumes in the last quarter on the Longhorn and BridgeTex pipelines that carry crude from the Permian Basin to Houston dropped dramatically since shippers likely exported barrels, meanwhile, refined product volumes grew on pandemic demand recovery. Volumes on the 450-mile (724-km) Magellan’s wholly-owned Longhorn crude oil pipeline from West Texas to Houston averaged approximately 200,000 bbl/d in the three months ended June 30 in contrast with 260,000 bbl/d in the same period the year before. A joint venture, the BridgeTex crude pipeline from the Permian to Magellan’s East Houston terminal dropped to 215,000 bbl/d from virtually 315,000 bbl/d in the year-ago period. However, volumes on the most prominent common carrier refined products pipeline system in the U.S. increased 3% partly because of pandemic demand recovery. Income from oil storage plunged as a steeply risen-in-price market made holding barrels less attractive and following contract expirations while operating expenses grew $28 million.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.