Phillips 66 Approves Funding for Two Midstream Projects in Southeast Texas - $3 Billion

Sweeny, TX Refinery Phillips 66
Sweeny, TX Refinery Phillips 66

Funding for two Southeast Texas midstream projects was approved in early February 2014 by Phillips 66's board of directors. Costs for the construction of a fractionator in Old Ocean, TX, announced in August of 2013, and a liquefied petroleum gas export terminal in Freeport, TX, are an estimated $3 billion combined.

According to Phillip's 66, the projects will create more than 50 full-time jobs and over 1,000 temporary construction jobs.

Read morePhillips 66 Plans Gulf Coast Fractionator

It’s an extraordinary time of opportunity for our company and our industry, especially in the rapidly growing midstream space,” said Tim Taylor, executive vice president, Phillips 66 Commercial, Marketing, Transportation and Business Development. “Given the anticipated growth in natural gas liquids production, we see substantial advantages in having fractionation and export facilities on the Gulf Coast outside of Mont Belvieu. These projects allow us to maximize our existing infrastructure and will position us for further growth.

Fractionator Located Close to Sweeny, TX Refinery

The "Sweeny Fractionator One" will be located close to the company’s Sweeny Refinery, and will supply purity natural gas liquids (NGL) products to the petrochemical industry and heating markets. Y-grade (mixed NGL) supply to the fractionator will come from nearby major pipelines, including the recently completed Sand Hills Pipeline.

The 100,000 bbls per day NGL fractionator is expected to be completed and online in the third quarter of 2015.

Liquefied Petroleum Gas Export Terminal in Freeport, TX

The "Freeport LPG Export Terminal" will be located at the company’s existing marine terminal in Freeport, Texas, and will allow growth for Phillips 66's midstream, transportation and storage infrastructure on a global scale. According to the company estimates, the terminal will have an initial export capacity of 4.4 million bbls per month, with a ship loading rate of 36,000 bbls per hour. The export terminal is expected to come online in mid-2016.

Fractionators are used to separate a raw NGL stream into its various components (ethane, butane, propane, etc.)

Plains All American Expanding Eagle Ford Fractionation & Condensate Stabilization

Plains All American Eagle Ford Assets
Plains All American Eagle Ford Assets

Plains All American plans to spend $120 million to construct a new natural gas liquids (NGL) fractionator and expand its condensate stabilization facility in South Texas.

The new fractionator  will be located near the company's Gardendale facilities in La Salle County, TX.

The fractionator is supported by third party commitments and will have capacity of 15,000 b/d of Y-Grade and off-spec Y-Grade products.

Also Read: Plains & Enterprise Announce Eagle For JV Pipeline Expansion

Plain All American's existing Gardendale truck and rail infrastructure will be upgraded to handle unloading and loading of Y-Grade products. Plains will also build 80,000 bbls of storage for the NGL products

The condensate stabilization train will be the third in the area and will provide approximately 40,000 barrels per day of incremental capacity.  Total capacity will be 120,000 b/d when it is completed.

Read more at paalp.com

Enterprise Completes 7th NGL Fractionator at Mont Belvieu

Mont Belvieu Fractionator
Mont Belvieu Fractionator

Enterprise Products brought its seventh fractionator online at the company's Mont Belvieu Complex earlier in September.

The new unit adds 85,000 b/d of fractionation capacity and expands the company's capacity at Mont Belvieu to 570,000 b/d.  An eighth plant will be online at the end of the year and will add another 85,000 b/d of capacity.

NGL fractionation capacity is important for shale plays like the Eagle Ford where high BTU gas is produced. Without fractionation capacity, the value of the individual NGL components, ethane, propane, butane, etc., can not be extracted from a mixed stream of NGLs.

Our eighth fractionator is also running ahead of schedule and should be in-service by mid-fourth quarter 2013. Fractionators seven and eight will increase total capacity at the partnership’s Mont Belvieu complex to 655,000 BPD, compared to 400,000 BPD just three years ago.
— Michael A. Creel, CEO

Enterprise operates the units and Western Gas owns a 25% interest in the 7th and 8th fractionators at Mont Belvieu.

Read the full press release enterpriseproducts.com

Phillips 66 Plans Gulf Coast Fractionator

Mont Belvieu Factionator
Mont Belvieu Factionator

Phillips 66 is planning to build a 100,000 b/d fractionator in Old Ocean, TX. The plant will alleviate congestion in Mont Belvieu and add an outlet for Y-grade NGLs from the Eagle Ford. The plant will be located near the company's Sweeney Refinery and will have access to Gulf Coast petrochemical customers and the Month Belvieu distribution network.

Fractionators are used to separate NGL production into its various components (ethane, butane, propane, etc.).

“This project would enable us to take advantage of strong existing midstream transportation and storage infrastructure along with demonstrated operations excellence,” said Phillips 66 Chairman and CEO Greg Garland. “We see excellent market-facing opportunities to grow the natural gas liquids business, and the chance to supply purity NGLs and liquefied petroleum gas to the petrochemical industry and heating markets.”

Phillips 66 is currently seeking interest from suppliers of Y-grade NGLs.

The plant will also create even more Texas oilfield jobs. Hundreds of construction workers will be needed and 25 full-time positions will be created to run the plant. Construction should begin in early 2014 and the plant should be in service in late 2015.

Phillips already owns fractionation capacity in the Gulf Coast, at Mont Belvieu, and in Conway, Kansas.

Read more at Phillips66.com

Kinder Morgan - KKR Announce Midstream Deal for Camino Real and Altamont Assets

Kinder Morgan is acquiring KKR's 50% interest in a joint-venture with El Paso that controls gathering and processing assets in Utah and the Eagle Ford Shale for $300 million. The deal is a precursor to the $20+ billion Kinder Morgan - El Paso acquisition that will close in May. At closing of both deals, Kinder will own 100% of the two systems. Both systems were in place to help gather and process El Paso's upstream oil and gas production in the areas. The Camino Real System in South Texas has capacity of 150 mmcf/d and 110,000 b/d. The Altamont system is larger and includes over 1,000 miles of pipelines, a processing plant, and a natural gas fractionator.

With over 1,100 miles of pipeline infrastructure, the Altamont system includes over 450 well connections with producers, and it operates a processing plant with the design capacity of 60 million cubic feet per day (MMcf/d) and a 5,600 barrel per day (Bpd) natural gas liquids fractionator. The Camino Real Gathering System has 150 MMcf/d of gas gathering capacity and 110,000 Bpd of oil gathering capacity.

Read the entire news release at kindermorgan.com