TRISTATE’S BIG FIVE PIPELINE PROJECTS

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Keystone XL Pipeline construction woes mean smaller, more specific projects have emerged to move “stranded” Bakken Crude to distribution and refining centers.

Upland

TC Corp., has designed the Upland Pipeline to access crude from multiple points in North Dakota and connect with Energy East Pipeline System at Moosomin, Sask. The company says the project will cost $600 million.

TC’s Feb. quarterly report said bids closed last fall and set a construction schedule for the pipeline — which will move Williston Basin crude to TC’s Energy East Pipeline in Saskatchewan — to be operational by 2018.

The 300,000-barrels-per-day vein will eventually service East Coast markets. TC Corp. was trading at $24.74 at press time.

Double H

In January, Kinder Morgan Inc (KMI.N) bought Hiland Partners from Continental Resources Inc (CLR.N) for $3 billion. The deal—which included the new 84,000 barrels per day Double H pipeline–gave Kinder entry into the Bakken. Double H connects to Tallgrass Energy Partners’ (TEP.N) Pony Express pipeline in Guernsey, Wyoming, and services the crude oil futures hub in Cushing, Oklahoma.

We are delighted to establish a substantial midstream footprint in one of the most prolific oil producing basins in the United States,” said KMI Chief Executive Richard D. Kinder, in a January press release. “Hiland’s systems serve some of the Bakken’s largest and most successful producers, including Continental.”

Sandpiper

Sandpiper would connect stranded crude to Enbridge’s key logistical storage terminal at Superior, Wis. In March, the company said it had over $2.6 billion of ongoing pipeline development projects in North America. Investors’ negative reactions to capital expenditures while oil prices slid, however, have had effects on oil and gas stocks, and Enbridge’s price fluctuated between $45-$50 over the past 30 days.

Pony Express

Tallgrass Pony Express Pipeline, LLC (PXP) is an oil pipeline that transports Bakken crude to Cushing, Oklahoma. The pipeline combines the conversion of a natural gas pipeline with new construction. TEP recently bought an additional 33.3 percent interest in Tallgrass Pony Express Pipeline, LLC (“Pony Express”) for $700 million. The deal pushed TEP’s ownership to 66.7 percent. Its stock gained over $10 since December, closing at $48. 72 on March 6.

The Summit System

Summit Midstream Limited Partners owns and operates more than 2,300 miles of pipeline, and has a rapidly expanding network in western North Dakota. “With the recent expansion of our Bakken Shale gathering assets and Summit Utica, we have increased our total inventory under development at Summit Investments to over $2 billion,” said Summit Midstream President and CEO Steve Newby in a Q4 earnings call.

The company’s stock has been sold sharply in recent weeks, however, losing $6.37 since Feb. 18 to close at $33.88 on March 6. Over this time, several news reports emerged that Summit had antiquated leak detection abilities on its Bakken system, which had sprung a leak.

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