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Magellan Reported Volume Changes on Its LongHorn and BridgeTex Pipelines

According to a July 28 report, Magellan Midstream Partners LP marked 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.

Following Russia’s invasion of Ukraine, Europe's request for barrels increased and shippers on the long-haul crude oil lines took volumes elsewhere, likely to be exported from the main port for oil exports – Corpus Christi, Texas, which is the largest U.S. crude export port.

Being an example of potential decisions that U.S. shippers could be making the moves are expected to be temporary. Shippers that did not fulfill their obligations would still have income which is known as deficiency payments, which are actually penalties for not transporting oil.

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.

The Tulsa, Okla.-based company expects relatively flat volumes for a few years on the Longhorn and the Bridgetex crude pipelines.

Meanwhile, on the Saddlehorn pipeline in Colorado, another joint venture, volumes were almost the same, and levels on the company’s South Texas systems rose.

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.

Magellan is an important owner of tanks at the Cushing, Okla., storage hub, where levels have held almost above the operational lows of 20 million barrels in recent weeks. Magellan has a 9,800-mile refined products pipeline system with 54 connected terminals and two marine storage terminals (one of which is owned through a joint venture). Moreover, it owns about 2,200 miles of crude oil pipelines, a condensate splitter and storage facilities with an aggregate storage capacity of about 39 million barrels, of which 29 million are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 31 million barrels of this storage capacity (including 25 million barrels used for contract storage) are wholly-owned, and the remainder is owned through joint ventures.

If you are further interested in finding more information about the crude midstream infrastructure and current trends, please, contact our Houston sales office or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.

Tyler Reitmeier Tel. +1 713-203-3128 Email: treitmeier@hartenergy.com

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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.

Undisclosed industry sources said that THQ Appalachia I LLC (Tug Hill and Quantum Energy) is seeking a sale of the U.S. natural gas producer for more than $5 billion, including debt. Mainly operating in the Marshall and Wetzel counties in West Virginia, THQ Appalachia has net production of around 760 MMcf/d. Despite volatility in commodity markets which has made the valuation of energy producers tougher, THQ Appalachia is anticipating more than $5 billion due to the worth of its existing production and the possible value of its undeveloped acreage, the sources said on June 17. Additionally to purchasing THQ Appalachia, possible bidders in the sale process also have the opportunity to buy XcL Midstream, the pipeline firm that moves the company’s gas to market and has the same CEO as in Tug Hill. If the same buyer chooses to purchase XcL, the deal consideration will increase further. However, the anonymous sources admitted that the sale depends on the market conditions and is not guaranteed since Tug Hill and Quantum could ultimately decide to retain some or all of THQ Appalachia and XcL’s assets. Tug Hill and Quantum refused to comment on these statements and XcL did not respond to a comment request.

On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.

On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.

Talos Energy Inc. is closing its $1.1 billion purchase of private operator EnVen Energy. A special meeting for Talos’ stockholders to vote on the deal and other matters is set on February 8, according to a prospectus filed on January 11 with the Securities and Exchange Commission. Shareholders are being asked to approve the EnVen merger, which as the company considered in September would raise its Gulf of Mexico production up to 40%. According to a January 11 press release, Talos asserted that it anticipates closing the transaction soon after the meeting. Talos Energy Inc. supposes that adding EnVen would double its operated deepwater facility footprint, extending key infrastructure in existing Talos operating areas. More than 80% of the combined assets will be deepwater, with the company operating more than 75% of the acreage it holds interests in. Talos is one of the largest independent operators in the U.S. Gulf of Mexico, with production operations, prospects, leases, and seismic databases spanning the basin in both Deep Water and Shallow Water. The company aims to actively grow through a balanced focus on asset optimization, development, and exploration while also seeking to add to its portfolio through acquisitions and business development.

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