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    MIDSTREAM NEWS

    Enable Midstream inks Bakken deal with XTO

    The crude services subsidiary of Enable Midstream Partners LP has entered into a long-term agreement with Exxon Mobil subsidiary XTO Energy Inc. to gather XTO's crude oil production through a new system that will be constructed in North Dakota's Bakken shale.

    The agreement is entered into pursuant to an open season announced by Enable Midstream on February 3, 2014. Under the terms of this new agreement, which is secured through acreage dedications, Enable Midstream will provide services to XTO through a crude oil gathering system to be constructed in Williams and Mountrail counties of North Dakota. The new system will have a capacity of up to 30,000 barrels per day of crude gathering and include 85 miles of crude gathering lines. A second agreement includes the construction of a water gathering and transport system for produced water. The water system will include 75 miles of gathering lines. The systems are expected to commence initial operations during the second quarter of 2015.

    This is the second crude gathering system Enable Midstream has committed to build in the Bakken area. In April 2013, the company announced its first long-term agreement with XTO to construct a crude oil gathering system in Dunn and McKenzie counties of North Dakota. That gathering system began initial operations in November 2013 and, upon final completion, is expected to have a capacity of up to 19,500 barrels per day.

    Enable Midstream is a joint venture formed in May 2013 that includes CenterPoint Energy Inc. interstate pipelines and field services businesses and the midstream business of Enogex LLC, a previous subsidiary of OGE Energy Corp. It is managed by a general partner whose governance is shared by CenterPoint Energy and OGE on a 50/50 basis.

    PennTex Midstream launches with Permian, North LA deals

    PennTex Midstream Partners LLC has signed two separate midstream transactions to build two gathering and processing platforms in the Permian Basin and Northern Louisiana.

    Founded by Thomas F. Karam, CEO, along with Robert O. Bond, COO, and Steven R. Jones, CFO, PennTex has received an equity commitment from NGP Energy Capital Management (NGP) through its affiliate, NGP Natural Resources X LP.

    On February 21, 2014, PennTex closed on its first transaction with the acquisition of a majority interest in Atlantic Midstream LLC which will be renamed PennTex Permian LLC. The assets under construction will serve producers in the Delaware Basin, primarily in Reeves, Pecos and Ward counties in West Texas. PennTex Permian's first phase of operations will be in service by the end of March 2014, and will consist of low and intermediate pressure gathering pipelines and associated compression. In July 2014, PennTex Permian will complete and put into service a 60 MMcf/d cryogenic natural gas processing plant in Reeves County, along with a natural gas liquids pipeline. PennTex is in discussions with multiple producers in the region regarding midstream services, and is planning near-term expansions to add natural gas gathering and processing capacity and other services.

    On March 17, 2014, PennTex closed the formation of PennTex North Louisiana LLC, a joint venture between PennTex and producers in North Louisiana that establishes an area of mutual interest among the parties in North Louisiana for the development of midstream infrastructure. The initial phase of growth consists of the construction of a 200 MMcf/d cryogenic processing plant and associated natural gas residue and natural gas liquids pipelines. PennTex NLA expects this initial system to be in commercial operations in the first quarter of 2015.

    Kinder Morgan to invest $1B to expand CO2 network

    Kinder Morgan Energy Partners LP will build and operate a new, 213-mile, 16-inch diameter pipeline to transport carbon dioxide from the company's St. Johns source field in Apache County, Ariz., to the Kinder Morgan-operated Cortez Pipeline in Torrance County, NM.

    The new Lobos Pipeline will have an initial capacity of 300 million standard cubic feet per day and will support current and future enhanced oil recovery (EOR) projects owned by Kinder Morgan and other operators in the Permian Basin of West Texas and eastern New Mexico. The company plans to invest approximately $300 million on the pipeline, and an additional $700 million to drill wells and build field gathering, treatment and compression facilities at the St. Johns field. The project is expected to be in service by the third quarter of 2016 pending receipt of environmental and regulatory approvals.

    SMLP closes Red Rock drop-down acquisition

    Grand River Gathering LLC, a wholly owned subsidiary of Summit Midstream Partners LP, has closed its acquisition of Red Rock Gathering Co. LLC from a subsidiary of Summit Midstream Partners LLC (Summit Investments) for a total cash consideration of $305 million. The Red Rock drop-down transaction was financed with the net proceeds from SMLP's primary equity offering of 5.3 million common units and borrowings under SMLP's revolving credit facility. Red Rock is a natural gas gathering and processing system located in the Piceance Basin in western Colorado and eastern Utah with 1,480 miles of low-pressure and high-pressure pipeline, 54,000 horsepower of compression, and two processing plants with 50 MMcf/d of processing capacity. The Red Rock system gathers and processes natural gas, primarily under fee-based contracts, for more than 55 producer customers.

    Outrigger develops midstream system in Delaware Basin

    Outrigger Energy LLC has started development of a midstream system in the Delaware Basin of West Texas. The Outrigger system will initially be located in Loving and Winkler counties, Texas. Outrigger has received acreage dedications from an independent producer to anchor the system and is in discussions with several more to further expand it. Outrigger's facilities will include wellhead gathering pipelines for natural gas, crude oil and produced water, three field-level compressor stations, and a cryogenic processing plant with capacity up to 60 MMcf/d which also includes treating capabilities. The crude oil system will connect to multiple takeaway pipelines, as well as a potential rail outlet in Wink, Texas.

    Atlas Pipeline Partners to review ownership interest in WTXLPG

    Atlas Pipeline Partners LP has retained Citigroup Global Markets Inc. to begin a strategic review of its ownership interest in the West Texas LPG Pipeline Limited Partnership (WTXLPG). To the extent that Atlas Pipeline executes any transaction, the potential proceeds will be used to fund part of its significant growth opportunities in its core operating areas. WTXLPG owns a 2,295-mile common-carrier y-grade natural gas liquids pipeline operated by a subsidiary of Chevron Corp. Atlas Pipeline owns a 20% interest in WTXLPG. The pipeline receives natural gas liquids from multiple receipt points in the Permian Basin and Barnett shale play in Texas, and transports volumes to Mont Belvieu, Texas, for fractionation.

    Atlas Pipeline Partners is active in the gathering and processing segments of the midstream natural gas industry. In Oklahoma, southern Kansas, Texas, and Tennessee, the company owns and operates 14 active gas processing plants, 18 gas treating facilities, as well as approximately 11,200 miles of active intrastate gas gathering pipeline.

    Williams Partners acquires Williams' Canadian assets

    Williams Partners LP has completed the transaction to acquire Williams' currently in-service Alberta, Canada operations for US$1.2 billion. The partnership announced the agreement on Feb. 26. The assets include an oil sands offgas processing plant near Fort McMurray, 260 miles of NGL and olefins pipelines, as well as an NGL/olefins fractionation facility and butylene/butane splitter facility at Redwater.

    Williams Partners also acquired an in-progress expansion project at the Redwater facility. The expansion will provide additional fractionation business to Williams Partners related to development of offgas processing at the CNRL Horizon upgrader facility retained by Williams.

    Williams Partners expects the addition of these assets via this acquisition will be accretive to distributable cash flow, on a per-unit basis for the partnership's unitholders. Williams Partners funded the acquisition with the issuance to Williams of 25.6 million Class D payment-in-kind (PIK) limited-partner units, $25 million in cash and an increase to the general partner's capital account to maintain Williams' 2% general-partner interest.

    Upon conversion of the PIK units, Williams expects to gain increased distributions from Williams Partners. Following this transaction, Williams owns 66% of Williams Partners, including the general-partner interest.


    BRIEFS


    Goldboro LNG export facility receives approval

    Pieridae Energy (Canada) Ltd. has received environmental assessment (EA) approval, with conditions, for the company's proposed Goldboro LNG project, as issued by the Honorable Randy Delorey, Minister of Environment for the Province of Nova Scotia. Goldboro LNG consists of an LNG processing plant and facilities for the storage and export of LNG, including a marine jetty.

    Goldboro LNG will produce up to 10 million metric tonnes per annum of LNG per year and will have onsite storage capacity of 690,000 cubic meters of LNG. The company has submitted an application to the National Energy Board to import up to 1.0 bcf/d of natural gas through the existing pipeline systems between Canada and the US, and to export up to 1.4 bcf/d of natural gas, as LNG, from Goldboro to international markets.

    Current estimates value the capital expenditures of the project at US$8.3 billion. Pieridae will make its final investment decision in 2015 and, if the company decides to proceed, Goldboro LNG will be operational in 2020.

    Rimrock acquires Kansas gathering system

    Rimrock Midstream LLC has closed on the acquisition of an eastern Kansas crude oil pipeline system from Rose Rock Midstream Crude LP. The system includes approximately 45 miles of common carrier pipeline and supporting truck stations that gather crude oil produced in the Flint Hills region of Butler and Greenwood counties.

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