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Gulfport bets $1.85B on Oklahoma; Inter Pipeline focusing on NGL processing


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Gulfport bets $1.85B on Oklahoma; Inter Pipeline focusing on NGL processing

Appalachia to Oklahoma: Gulfport Energy makes $1.85B play for diversification

With its $1.85 billion takeout of one of the top shale producers in Oklahoma, the Utica shale driller Gulfport Energy Corp. joins the list of gas drillers diversifying out of Appalachia and into shales closer to gas and liquids demand on the Gulf Coast.

Gulfport did not explicitly say it is impatient with the progress of pipeline developments to take gas and liquids out of glutted markets in Ohio and Pennsylvania, but it pointed out, on the second page of its corporate presentation, that the SCOOP has significantly better basis costs than Appalachia, where costs of $1/MMBtu above hub prices are common.

Gulfport's new Oklahoma acreage, with four operating rigs and 183 MMcfe/d of current production that is 67% gas and 33% crude and liquids, is "positioned near expanding natural gas and NGL demand centers — premium pricing and low basis differentials," Gulfport's presentation said.

Inter Pipeline to funnel most of 2017 CapEx into NGL processing unit

Inter Pipeline Ltd. declared a 2017 CapEx program amounting to C$545 million, 87% of which has been allocated for organic growth initiatives across its business units, with the majority going to NGL processing.

Inter Pipeline expects to invest C$305 million in its NGL processing unit, mostly to push development of its planned propane dehydrogenation plant and polypropylene facility in central Alberta, according to a Dec. 19 news release. Some C$75 million would be used for engineering and long-lead procurement for the facilities, and C$195 million would go to front-end design work and construction, if the facilities receive the necessary approvals.

The petrochemical facilities would convert locally sourced propane into polypropylene and are estimated to cost C$3.15 billion. Inter Pipeline expects to make a final investment decision on the projects by mid-2017, and the in-service date is scheduled for mid-2021.

NGL Energy Partners to buy La., Okla. liquids assets from Murphy Energy

NGL Energy Partners LP got clearance from the U.S. Bankruptcy Court to buy NGL assets in Louisiana and Oklahoma from Murphy Energy Corp. for about $51 million.

The assets, which also include long-term, fee-based contracts, are a strategic fit in NGL Energy Partners' liquids and crude oil segments and expand its midstream presence in the Midcontinent and Gulf Coast, the partnership said in a Dec. 20 news release.

The assets include an NGL terminal in Port Hudson, La., and an NGL and condensate facility in Kingfisher, Okla., in the STACK play.

Phillips 66 launches full operations at Freeport LPG export terminal

Phillips 66 Co. placed its Freeport LPG export terminal in full service, fulfilling part of its initiative to respond to growing international demand for U.S. NGLs.

The export terminal is capable of simultaneously loading two ships carrying refrigerated propane and butane at a combined rate of 36,000 barrels per hour, according to a Dec. 16 news release. The supply comes from Phillips 66 Partners LP's 100,000-barrel-per-day Sweeny fractionator and the 7.5-MMbbl Clemens storage facility connected to the Mont Belvieu hub.

Propane prices mark small gain to near 2-year high as cold weather boosts demand

The propane market reacted to cold weather and signs of improving demand during the trading week and moved to the highest levels in more than two years.

Lone Star pipeline grade propane at Mont Belvieu, Texas, rose 0.45 cent to trade at 63.00 cents per gallon in the week ended Dec. 16, while non-LST propane increased 0.65 cent to trade at 62.45 cents per gallon. Prices at the hub in Conway, Kan., gained 1.15 cents and traded at 61.40 cents per gallon.