US pipeline companies scale back expansions

: Crude oil, Oil products
20/05/19

US midstream companies have reduced planned crude pipeline capacity expansions by more than 1.4mn b/d through deferrals or scale-backs in the wake of the collapse in oil prices and efforts to contain the Covid-19 pandemic.

Though at least four planned crude pipelines have been deferred or downscaled, other major projects are still in the works, including a 1mn-1.5mn b/d crude and condensate pipeline from the Permian basin to the US Gulf coast.

The US has seen a large midstream build in recent years, pushed by record production and growing demand for exporting US crude. But the collapse in oil prices and the plummet in demand related to the pandemic has put the brakes on the midstream frenzy.

Enterprise Products Partners, a key player in US crude exports, deferred its 450,000 b/d Midland-to-Echo 4 crude pipeline, as part of a $1.1bn drop in capital expenditures in 2020. The line was pushed back about six months and is now expected to start in the second half of 2021, the company said last week. The project is an expansion of Enterprise's system from the Permian to the Houston area.

Enterprise is also building a portion of an ExxonMobil-led 1mn-1.5mn b/d crude and condensate pipeline system. That joint venture (JV) project, known as Wink-to-Webster, involves seven companies, including Plains All American Pipeline and Marathon's midstream segment MPLX. The system will move crude from Wink and Midland in the Permian to multiple locations near Houston, including Webster and Baytown, with connectivity to Texas City and Beaumont. ExxonMobil has a 560,000 b/d refinery in Baytown and a 362,000 b/d refinery in Beaumont.

The most resilient

That Wink-to-Webster project is on schedule to be in service in the first half of 2021, anchored by long term contracts.

Two of the largest refiners in the Gulf coast will buy oil from the Wink-to-Webster line, Plains chief executive Willie Chiang said earlier this month on an earnings call. The project is "a good example of capital efficiency" and "probably the most resilient pipe out there," he said.

Another large midstream company, Energy Transfer, has downscaled the planned Ted Collins pipeline which will connect a terminal in the Houston Ship Channel to Nederland, Texas.

The Ted Collins line will now have a capacity of 275,000 b/d and will use some existing infrastructure to lower costs. The scaled-down project should enter service in the fourth quarter of 2021. The previous plan was for a new-build project with 500,000 b/d of capacity.

US refiner Phillips 66 paused two large crude projects — the Red Oak and Liberty pipelines — and will make a decision on whether to continue them later. Both were previously scheduled to start service in early 2021.

Red Oak, a JV with Plains, would transport crude from the Permian and Cushing, Oklahoma, to Texas ports. That project included leasing capacity on Plains' existing Sunrise pipeline system as well as new builds.

The Liberty pipeline, a JV with Bridger, would have moved 350,000 b/d of Rockies and Bakken production to Corpus Christi. Phillips 66 also postponed a final investment decision on the Ace pipeline project that would connect supply in St James, Louisiana, to refineries in the region.

Other large US pipeline projects remain on schedule even as companies slash spending after the collapse in crude prices which started in early March but hit a new low point on 20 April, when the Nymex WTI front month contract settled in negative territory.

Energy Transfer is moving forward on a plan to expand capacity of its 570,000 b/d Bakken crude pipeline system from North Dakota to the US Gulf coast. The company anticipates expanding the system to "somewhere in the range" of 750,000 b/d but the capacity could go higher depending on discussions with shippers, the company said on an 11 May earnings call.

Energy Transfer said previously that the expansion could nearly double capacity on the line to about 1.1mn b/d. Some of the incremental capacity should be available in the second quarter of 2021. The expansion project only involves adding pump stations, which is a fraction of the cost of building new lines.

The Bakken system includes the Dakota Access pipeline from the Bakken fields in North Dakota to Patoka, Illinois, and the connecting Energy Transfer Crude Oil pipeline to the US Gulf coast.

Three partners are moving forward with a plan to reverse the 1.2mn b/d Capline crude pipeline to move south from Patoka to St James. Marathon, BP and Plains plan to offer light crude shipping in mid-2021 and heavy crude service in 2022.

Plains is also moving forward with a planned expansion of the 200,000 b/d Diamond crude pipeline from Cushing to Memphis, Tennessee, and a 45-mile (72km) pipeline extension to connect it to Capline.

In addition, two large crude projects that cross the US-Canada border are still in the works but facing regulatory and legal delays.

TC Energy's 830,000 b/d Keystone XL pipeline from western Canada to the US midcontinent was dealt another blow last month when a US federal court vacated a key water crossing permit known as Nationwide Permit 12, sending it back to the US Army Corps of Engineers.

"The long-term potential delay with any of these kinds of very omnibus-type filings or motions to vacate a permit that broad could have up to a year delay on the ultimate project," said TC Energy senior vice president of liquids pipelines Bevin Wirzba on 1 May. But the company has been "mitigating those types of impacts," he said.

TC Energy is looking at alternatives in the event the permit is not reinstated, including pursuing different individual permits for some pipeline sections and avoiding certain routes.

Another Canadian company, Enbridge, is moving forward with a project to replace its Line 3 crude pipeline system from Alberta to Wisconsin. Line 3 has been running at 390,000 b/d in recent years, and will be restored to its original capacity of 760,000 b/d.

Minnesota regulators in February approved a revised environmental review for the Line 3 project, but more permits are needed before Enbridge can start US construction. The project is at risk of exceeding its $6.4bn (C$9bn) budget depending on the final in-service date, Enbridge said.

By Eunice Bridges

US pipeline status update
Status	Project	Partners	Capacity '000 b/d	Origin	Destination

Deferred	Red Oak	P66/Plains	400	Cushing	US Gulf coast
	Liberty	P66/Bridger	350	Rockies/Bakken	Cushing, OK
	Midland-to-Echo 4	Enterprise	450	Midland	Houston
Scaled back	Ted Collins	Energy Transfer	to 275 from 500	Houston	Nederland, TX
On track	Wink to Webster	Exxon/Plains/others	1,000-1,500	Wink, Texas	Houston
	Midland-to-Echo 3*	Enterprise	450	Midland	Houston
	Dakota Access expansion	Energy Transfer	1100	Bakken	US Gulf coast
	Diamond expansion	Plains/Valero	400	Cushing	Memphis, TN
	Capline reversal	Marathon/Plains/BP	1200	Pakota, IL	St James, LA
	Keystone XL	TC Energy	830	Hardisty, Alberta	Steele City, NB
	Line 3	Enbridge	760	Alberta	Wisconsin
*part of Wink to Webster

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24/11/16

Cop: Parties continue slow work on finance goal: Update

Updates throughout Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , but it is unlikely to yield progress on key sticking points. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. The current draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. And the new version due to come out today is unlikely to show meaningful progress on these issues, observers suggested, leaving them for ministers to tackle next week. Technical negotiators continue to try and move forward on topics such as funds' access and transparency. Developed countries have still not proposed a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". Multi-layered The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035". The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided and mobilised $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", language that developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Developing nations are not against private sector financing, but they want the main figure for the new finance goal to come from public sources, observers said. Some parties on both sides are calling for an acceleration of the reforms of multilateral development banks, key to leverage billions in private sector finance, as well as for the use of taxes and levies. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell today called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multilateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick, Jacqueline Echevarria and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Colombia’s climate plan to address fossil fuels

24/11/16

Cop: Colombia’s climate plan to address fossil fuels

Baku, 16 November (Argus) — Colombia will seek to address the "divisive issue" of "the proliferation of fossil fuels" in its next emissions reduction plan — nationally determined contribution (NDC), environment minister Susanna Muhammad told Argus, adding that it would prompt a "strong debate" in the country. Colombia's president Gustavo Petro seeks to end the country's dependence on fossil fuels, while promoting a transition to clean and renewable energy. "Of course this is a very divisive issue, especially for a country that is looking for a whole economy transition," Muhammad said on the sidelines of the UN Cop 29 climate summit in Baku. "And trying to get the whole of society and the whole of government behind that will be a strong debate." Petro ordered an end to new hydrocarbon exploration and production contracts soon after taking office in August 2022. Petroleum association ACP said that Colombia's crude output will begin declining in 2027 as reserves are insufficient to maintain output amid falling exploratory activity. Petro's ambition to phase out fossil fuels risks sacrificing key revenues for the country. But Muhammad highlighted the need to achieve an ambitious financial goal that supports a just transition in developing economies. "We cannot continue playing with the same financial rules of the game," she said. "What we are seeing at this Cop 29 is that we need solidarity and fairness in the process of financing this transition." "We said in Dubai that we would triple renewables by 2030. The question remains, who is going to triple renewables and for whom?" she said, pointing to the significant gap in renewables expansion between developed and developing economies. Countries at Cop 28 in Dubai, the UAE, last year agreed on a deal that included transitioning away from fossil fuels, tripling renewable energy capacity and doubling annual energy efficiency gains globally by 2030. Muhammad added that the country will be submitting its NDC to the UN climate body the UNFCCC by June next year because it will "go through a very strong consultation process" with different sectors of the economy. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years. "Our main source of emissions is deforestation, agriculture practices, especially cattle ranching," she said, adding that the government is seeking the participation of actors that are at the forefront of the climate crisis. Risky business Talking about the possibility of the US pulling out of the the Paris Agreement and Argentina's delegation exiting negotiations in Baku, she warned that by not putting the people first in the fight against climate change, leaders are risking that other "authoritarian" regimes or "climate deniers" take more power. Brazil's secretary for climate change Ana Toni said today that private companies like policy consistency and that businesses need to look at the countries that are showing climate commitment and consistency in their NDCs. "The climate crisis is irreversible, we need to focus on climate action and implementation," Toni said. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Parties continue work on new finance goal

24/11/16

Cop: Parties continue work on new finance goal

Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , before convening for a plenary session later today, according to the summit's presidency. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. The draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. Parties continue to stick to their positions. Developed countries have still not come forward with a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035. The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", which developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Some parties on both sides are calling for the reforms of multilateral development banks, key to leverage billions in private sector finance, to accelerate. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell [today urged G20 leaders to make the climate crisis](https://direct.argusmedia.com/newsandanalysis/article/262963 "order of business number one". He called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: UN’s Stiell urges G20 to make climate its priority

24/11/16

Cop: UN’s Stiell urges G20 to make climate its priority

Baku, 16 November (Argus) — Leaders at next week's G20 summit should make the climate crisis "order of business number one" as negotiations on a new climate finance goal continue at the UN Cop 29 climate conference in Baku, Azerbaijan, UN climate body chief Simon Stiell said today. "Stepping it up on climate finance globally requires action both inside our Cop process and outside of it," Stiell said, and the G20's role is "mission critical". Stiell called on G20 leaders meeting in Rio de Janeiro, Brazil, on 18-19 November to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Some delegates at Cop have noted that the outcome of the G20 meeting will be key for climate finance . G20 in India last year recognised the need to increase global climate investments to trillions of dollars from billions, from all sources, highlighting that $5.8 trillion-5.9 trillion is required before 2030 for developing countries to implement their climate plans. The communique had called on "parties" to set an ambitious goal from $100bn/yr floor, which developed countries committed to mobilise through 2025. Brazil this year is looking to use its G20 presidency to advance agreement on energy transition finance , having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. Stiell said today that there is a "long way to go" on talks to agree a new climate finance goal for developing nations in Baku. A round of informal consultations on a third draft text took place late yesterday , but the document was still far off striking a compromise between developed and developing countries on central aspects including the amount of funds to be given, which countries should contribute, and how the money should be used. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Adv Fame marine blend premiums to fossil hit year lows

24/11/15

Adv Fame marine blend premiums to fossil hit year lows

London, 15 November (Argus) — The premiums of advanced fatty acid methyl ester (Fame) 0 ARA marine biodiesel blends to fossil fuel counterparts were marked at 2024 lows on 14 November, according to Argus assessments. Calculated B30 Advanced Fame 0 dob ARA prices fell by $31.54/t to $623.25/t, the lowest since March 2023. Calculated B100 Advanced Fame 0 dob ARA values tumbled by $102.77/t to just over $820/t, their lowest since 22 November last year. Consequently, the outright premium held by the B30 blend against very-low sulphur fuel oil (VLSFO) dob ARA narrowed by $30.54/t on the day to $123.25/t on 14 November — its narrowest since 29 December 2023. B100 held a $158.52/t premium to marine gasoil (MGO) dob ARA, down by $106.77/t on the day and its lowest premium this year. EU emissions trading system (ETS) prices were assessed at $71.79/t on 14 November. Accounting for EU ETS costs on the same day, ETS-inclusive premiums held by Advanced Fame blends against their fossil counterparts hit their lowest since the introduction of EU ETS into maritime at the turn of the year. B30 Advanced Fame 0's ETS-incorporated premium against VLSFO narrowed by $31.27/t to $96.11/t on the day to 14 November. B100 Advanced Fame 0's premium against MGO dropped by $109.28/t to $66.45/t when ETS costs were accounted for. Advanced Fame marine biodiesel blend values declined with thin spot demand owing to a shift in voluntary demand east of Suez. As a result, containerships seeking to deliver proof of sustainability (PoS) documentation to their customers, to offset the latter's scope 3 emissions, shifted their marine biodiesel demand to Singapore when feasible. PoS can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Lacklustre demand for the blends was complimented by soaring values for Dutch renewable tickets. The calculated Advanced Fame dob ARA range prices incorporate a deduction for HBE-Gs. These are a class of Dutch renewable fuels units, or HBEs, used by companies that bring liquid or gaseous fossil fuels into general circulation and are obligated to pay excise duty/energy tax on fuels. Dutch renewable HBE-G tickets were marked at €22/GJ on 14 November, their highest since Argus assessments began. Soaring HBE-G values were attributed](https://direct.argusmedia.com/newsandanalysis/article/2628738) to gains in European hydrotreated vegetable oil (HVO) prices, tight supply because of a decline in tickets from biofuels used in shipping and less overall biofuel blending in the fourth quarter. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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