OCTOBER 2017 OIL & GAS FINANCIAL JOURNAL | WWW.OGFJ.COM 15
natural gas system, Stakeholder also will expand its existing
San Andres Crude Gathering System.
Stakeholder’s comprehensive gas gathering, treating and
processing system will include low-pressure sour gas gathering
lines across Yoakum County, Texas, and into Lea County, New
Mexico. To support its expanded gathering footprint, Stakeholder will construct a treating and processing facility in Yoakum
County. The new facility will include front-end liquids handling,
an amine treater and acid gas injection well, a cryogenic processing plant with the capacity to process 60 MMcf/d, and a
nitrogen rejection unit.
Stakeholder also will expand its San Andres Crude Gathering
System in Yoakum County. The crude system was fully commissioned on May 1, 2017, and currently consists of approximately
90 miles of gathering pipelines, a crude oil storage terminal,
and multiple downstream pipeline connections. The expansion
will include additional gathering lines, pump stations, and
additions to storage capacity at Stakeholder’s crude terminal.
The acquisition of rights of way is underway, and the new
gathering lines are expected to come into service in the first
quarter of 2018.
San Antonio, TX-based Stakeholder is backed by venture
capital commitments from EnCap Flatrock Midstream.
TALL OAK III TO BUILD GATHERING SYSTEM
IN STACK PLAY
Tall Oak Midstream III LLC will construct a natural gas gathering
system in southeast Oklahoma’s East STACK play. The system
will span Hughes County and portions of Seminole, Pontotoc,
Coal, Pittsburg, Atoka, and McIntosh counties.
Initially, Tall Oak III’s East STACK system will consist of more
than 50 miles of 12-inch to 20-inch pipeline, two compression
facilities, a 5,000 bpd stabilizer, an associated slug catcher and
condensate storage facilities. The system is expected to come
into service by year-end. Tall Oak III expects to add a cryogenic
processing facility to its East STACK system.
Tall Oak III was formed earlier this year with an initial equity
commitment of up to $200 million from EnCap Flatrock Midstream and the Tall Oak III management team.
ENABLE MIDSTREAM TO BUY ALIGN MIDSTREAM
Dallas, TX-based Align Midstream Partners, a portfolio company
of Tailwater Capital, has entered into a definitive agreement
to sell the company to Enable Midstream Partners LP for approximately $300 million, subject to certain customary
Align operates a 100-million cubic foot per day cryogenic
natural gas processing plant in Panola, Texas, and approximately
190 miles of natural gas gathering pipelines across Rusk, Panola,
and Shelby counties in Texas and DeSoto Parish in Louisiana.
Enable’s assets include approximately 12,900 miles of gath-
ering pipelines, 14 major processing plants with approximately
2. 5 Bcf/d of processing capacity, approximately 7,800 miles of
interstate pipelines (including Southeast Supply Header LLC
of which Enable owns 50%), approximately 2,200 miles of in-
trastate pipelines and eight storage facilities comprising 85.0
billion cubic feet of storage capacity.
Simmons & Company International | Energy Specialists of
Piper Jaffray acted as Align’s exclusive financial advisor. Locke
Lord served as legal counsel to Align.
The transaction is subject to regulatory approval and closing
MAGELLAN MIDSTREAM, VALERO FORM JV
TO EXPAND PASADENA MARINE TERMINAL
Magellan Midstream Partners LP and Valero Energy Corp. noted
the expansion and joint development of the marine storage
facility currently under construction along the Houston Ship
Channel in Pasadena, Texas. The Pasadena facility, which will
handle petroleum products, including multiple grades of gasoline, diesel and jet fuel, and renewable fuels, will be owned
by a limited liability company that is owned 50/50 by Magellan
and Valero and will initially include 5 million barrels of storage,
truck loading facilities and 2 proprietary ship docks.
Phase 1 of the facility is under construction, which includes
approximately 1 million barrels of storage and a new marine
dock capable of handling Panamax-sized ships or barges with
up to a 40-foot draft. This first phase will now be owned by the
Further, this facility will be expanded by an incremental 4
million barrels of storage, a 3-bay truck rack and a second
marine dock capable of handling Aframax-sized vessels with
up to a 45-foot draft (Phase 2). After completion of this expansion, the Pasadena facility will be connected via pipeline to
Valero’s refineries in Houston and Texas City, Texas and the
Colonial and Explorer pipelines in addition to the already
planned connection to Magellan’s Galena Park terminal
Combined, Phases 1 and 2 of the Pasadena marine terminal
are currently estimated to cost approximately $820 million,
which will be funded equally by capital contributions from
Magellan and Valero. With the new arrangement, Magellan’s
incremental capital spending will be approximately $75 million
more than its previous spending estimates of $335 million for
phase 1 alone. Both phases are fully contracted with long-term
Magellan currently serves as construction manager and will
serve as operator once construction is complete. Phase 1 of
the new terminal is expected to be operational in early 2019,
with Phase 2 expected to come on-line in early 2020, subject
to receipt of necessary permits and regulatory approvals.
If warranted by additional demand, the new Pasadena facility
could be expanded to include an incremental 5 million barrels
of storage, another 3 docks and expanded truck loading capacity, for a maximum footprint of up to 10 million barrels of
total storage and up to 5 docks. All future expansions are expected to be owned by the jointly-owned company.