IN THE NEWS
Houston-Based Permico Energia Announces Natural Gas Liquids (NGL) Pipeline and Fractionator Project
HOUSTON (August 1, 2017) — Permico Energia, a privately held Houston-based midstream energy company, announces plans to construct a new Texas natural gas liquids (NGL) system comprised of 510 miles of 24-inch pipeline to ship West Texas Permian Basin NGL production to its planned 300,000 barrels per day fractionator near Corpus Christi, Texas. The project scope also includes construction of a 350-mile system of downstream product pipelines which will provide access to an eight-million- barrel NGL storage facility and to Texas Gulf Coast industrial markets, including the Mont Belvieu area. The system’s initial capacity of 330,000 barrels per day will be operational in the fourth quarter of 2020.
“Permico’s new energy corridor will provide operating and cost advantages over the traditional Mont Belvieu options, which will enable us to provide reliable, economically superior solutions to the growing demands of our customer partners,” said Jeff Beicker, CEO of Texas Permico Partners, a wholly owned subsidiary of Permico Energia. “We have enjoyed a positive reception from both sides of the pipe and are currently negotiating long term producer and industrial partner contracts.”
Permico Energia LLC was founded in 2015 by a team of senior executives with in-depth experience in energy infrastructure projects. Permico Energia is focused on developing, constructing and operating midstream assets in Texas, as well as the domestic and international marketing of hydrocarbons.
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Permico Energia LLC, Houston, plans to build a 510-mile, 24-in. OD NGL pipeline to ship West Texas Permian basin production to a newbuild 300,000-b/d fractionator near Corpus Christi, Tex. The project also includes construction of a 350-mile system of downstream product pipelines accessing both an 8 million-bbl storage site and Gulf Coast industrial users, including the Mont Belvieu, Tex., market.
The company expects to start construction second-quarter 2018 and have the full system in operation by fourth-quarter 2020. Permico is negotiating long-term supply and sales contracts.
Permico secured project funding through long-term commitments from Korean investment banking and pension fund institutions, with Sumitomo Mitsui Bank Corp. serving as lead syndicator for the senior debt financing.
Both Targa Resources Corp. and Enterprise Products Partners LP earlier this year announced plans to build NGL pipelines between the Permian basin and Mont Belvieu (OGJ Online, Apr. 10, 2017; May 26, 2017).
US Permico Energia to build NGL pipeline to Gulf Coast
HOUSTON (ICIS)–Permico Energia plans to build a 510 mile (821km) pipeline from the Permian basin in west Texas to a new fractionator it will build near Corpus Christi, according to information obtained on Friday.
The pipeline, called Companero, will have an initial capacity of 300,000 bbl/day of natural gas liquids (NGLs), said Permico, a US-based midstream company.
The fractionator, called El Centro, will have a capacity of 300,000 bbl/day, Permico said.
Another pipeline will lead from the new fractionator and terminate at the US NGL hub in Mont Belvieu, Texas, Permico said. It will have a length of 230 miles, have a capacity of 250,000 bbl/day and have ethane and propane service.
The fractionator will have yet another pipeline, called Markham, that will have a length of 116 miles, have a capacity of 175,000 bbl/day and have ethane, propane and y-grade service, Permico said. This pipeline will terminate at the Markham storage facility.
Construction will start in the second quarter of 2018, and operations should start in the fourth quarter of 2020, the company said.
Permico is now negotiating long-term producer and industrial-partner contracts, according to a statement by Jeff Beicker, CEO of the subsidiary Texas Permico Partners.
Project funding has been secured through long-term commitments from South Korean pension fund, Permico said. Sumitomo Mitsui Bank was the lead syndicator for the senior-debt financing.
Senior-debt financing should close in Q1 2018, Permico said. All project equity has been committed.
“Permico’s new energy corridor will provide operating and cost advantages over the traditional Mont Belvieu options, which will enable us to provide reliable, economically superior solutions to the growing demands of our customer partners,” Beicker said.
NGLs are important to the US petrochemical industry because they make up the majority of the feedstock used in its crackers
Fractionators separate NGLs into ethane, propane and other individual products.
There’s good news for petrochemical workers looking for a job along the Gulf Coast — Exxon Mobil Corp. is hiring at record rates. Also, an NGL midstream company will likely be hiring for an upcoming project. Meanwhile, an Oncor executive spoke on a bid from Berkshire Hathaway, while Andeavor officially took on a new name. Here are five things to know in Texas energy this week.
• Irving, Texas-based Exxon Mobil Corp.’s (NYSE: XOM) chemical division is hiring to fill positions related to a slew of downstream asset expansions along the Gulf Coast. On top of that, those that enter the workforce now have a lot of opportunity ahead of them as members of an aging petrochemical workforce retire. “We’re hiring at record levels today,” said Mike Zamora, the director of Americas regional manufacturing for ExxonMobil Chemical Co.
• Right now, Houston-based Permico Energia LLC only employs about 10 people, but the midstream company is preparing for an NGL project that, if completed, could bring its total headcount as high as 100 employees. The $2 billion project would include a fractionator in Corpus Christi and pipelines from the Permian to Corpus, and then from there, along the Gulf Coast and into Mont Belvieu.
• The man who might become the next CEO of Dallas’ Oncor, Senior Vice President and General Counsel Allen Nye, spoke on the company’s future and its potential as a portfolio company of Berkshire Hathaway Inc. Elliott Management Corp. is looking to put together funding for a bid of its own, but until then, “it’s important to remember that there is only one deal on the table – from BHE – and we believe it is by far the best deal we have seen so far,” Nye said.
• Houston-based Penn Virginia Corp. (Nasdaq: PVAC) has bought the Eagle Ford assets of Oklahoma City-based Devon Energy Corp. (NYSE: DVN) in a $205 million cash deal. The company thinks it can capture $40 million in reduced costs per year on the acreage, which sits contiguous with its existing position in the region.
• San Antonio refining company formerly known as Tesoro Corp. has taken on a new name and stock ticker. It is now known as Andeavor Corp. (NYSE: ANDV) as of the Aug. 1 opening bell. Andeavor was created following the merger of Tesoro and El Paso-based Western Refining Inc. (NYSE: WNR) earlier this year. The $6.4 billion deal closed in June when the newly merged company announced that it would be rebranded on Aug. 1.
West Texas to Corpus Christi NGL pipeline planned
Houston firm has lined up $2 billion for project
Updated 11:48 pm, Saturday, August 5, 2017
Permian Basin oil and gas operators have decades of holes to punch in West Texas and Southeastern New Mexico to coax crude oil and natural gas to the surface and ultimately to market.
Houston’s Permico Energia is betting approximately $2 billion that operators will continue to successfully produce crude and gas and demand by petrochemical complexes along the Gulf Coast will continue to grow.
The company has lined up $2 billion to construct a pipeline that will carry natural gas liquids from the Permian Basin to its planned 300,000-barrel-per-day fractionator near Corpus Christi. The project also includes a 350-mile system of downstream product pipelines that will help access an 8 million barrel NGL storage facility and industrial markets along the coast, including Mont Belvieu.
Construction is expected to begin in June or July of 2018 on the 24-inch pipeline, which will have initial capacity of 300,000 barrels per day. Beicker said the process is expected to take about 27 months; completion is expected in late third quarter or early fourth quarter 2020.
The pipeline will begin near Monahans, with a northwest lateral reaching into Southeastern New Mexico, and a northeast lateral reaching Midland-Odessa, gathering liquids along the way to ship to Corpus Christi. Beicker said future phases will entail picking up liquids from the Eagle Ford along the way, but for now that shale play has sufficient takeaway capacity.
He termed the pipeline a “Y-grade” pipeline. The natural gas frequently produced in association with crude oil in the Permian Basin, particularly the Delaware and Southeast New Mexico, includes natural gas liquids as part of its stream. That gas is run through processing plants and comes out as Y-grade, he said.
“If you look in the Permian Basin and where it extends into Southeastern New Mexico, there’s a lot of condensate and natural gas liquids. (Operators) look for gas with liquids,” he said. “It’s a value chain, and if you’re spending that amount of money to punch a hole in the ground, you want to get that money back as fast as you can.”
Petrochemical complexes in Corpus can take those liquids and split them into ethane, propane and butanes and sell those components on the market, he said.
Negotiations on long-term contracts with producers and industrial users are ongoing, he said.
Beicker estimates the project will create 80 new field jobs, from Monahans to New Mexico to Midland-Odessa, and 20 new jobs in Houston.
Project funding has been secured through long-term commitments from Korean investment banking and pension fund institutions, with Sumitomo Mitsui Bank Corp serving as lead syndicator for the senior debt financing. At present, all project equity has been committed and senior debt financing is expected to close in the first quarter of 2018.
Houston company planning $2 billion pipeline from Permian Basin to Corpus Christi
A Houston-based midstream energy company announced plans to build a 510-mile natural gas pipeline that would connect the Corpus Christi area to the Permian Basin.
Permico Energia’s $2 billion pipeline system would include a fractionator in the Coastal Bend to separate the natural gas into individual products, such as ethane, propane and butane.
It also include would a 350-mile system that will transport product to other Texas Gulf Coast industrial markets, including the Mont Belvieu area near Houston.
Jeff Beicker, CEO of Texas Permico Partners, a subsidiary of Permico Energia that started in 2015, said financing for the project has been secured from South Korean investment banking and pension fund institutions.
Construction is expected to start in the second quarter of 2018. The system’s initial capacity of 300,000 barrels per day would be operational in the fourth quarter of 2020.
The plant would employ roughly 80 field workers and 20 managers and executives.
Beicker on Thursday would not specify where exactly in the Corpus Christi area the plant would be built, saying the company still is in negotiations to buy the land.
One of the Coastal Bend’s advantages is its deep-water access at the Port of Corpus Christi. Such access has become increasingly scarce in energy markets along the Gulf of Mexico.
“If you look at a map of the Gulf … everywhere from Freeport to the Baton Rouge area has become congested,” Beicker said. “We’re really happy for the opportunity to be in the Corpus Christi area. We think it will be a lucrative corridor.”