Pembina Pipeline has agreed to acquire Kinder Morgan Canada and the U.S. portion of the Cochin Pipeline system in $3.3 Billion

HOUSTON (P&GJ) — Calgary-based Pembina Pipeline has agreed to acquire Kinder Morgan Canada and the U.S. portion of the Cochin Pipeline system in a C$4.35 billion (US$3.3 billion) deal that expands Pembina's crude oil storage capacity in a period of high regional demand.

Kinder Morgan Canada's Vancouver Wharves (photo: KML)

The sale includes a significant crude oil storage and terminalling business in Western Canada's key energy complex, including the Edmonton storage and terminal business and Vancouver Wharves, a bulk storage and export/import business. The complex connects Pembina's conventional and oil sands pipelines to all major export pipelines.

The transaction includes 100% of the 1,810-mile Cochin Pipeline system, including the Canadian portion owned by Kinder Morgan Canada and the U.S. portion, which accounts for nearly half of the deal at C$2.05 billion (US$1.54 billion).

"(The acquisition) represents an ideal opportunity to continue building on our low-risk, long-term, fee-for-service business model while extending our reach into the U.S. through a highly desirable cross-border pipeline, said Mick Dilger, Pembina's president and CEO. "Further, it will enhance our diversification as well as Pembina's customer service offering as a leading provider of integrated services to hydrocarbon producers in Western Canada."

The 95,000-bpd Cochin system, which currently imports condensate into the Alberta region to dilute its heavy oil production, crosses seven three U.S. states and three Canadian provinces.  It connects Pembina's operations in the Channahon, Bakken and Edmontonareas to markets in Mont Belvieu, Conway and Edmonton. Pembina said there is also potential to connect the eastern leg of the Cochin system to its assets and markets in Sarnia, Ontario.

The Edmonton crude oil complex includes 10 million barrels of storage capacity, inbound and outbound connectivity, which Pembina views as "highly attractive in the current environment."  Pembina said it has identified a number of expansion possibilities at Vancouver Wharves, a 125 acre bulk marine terminal facility that currently transfers more than 4 million tons of bulk cargo annually.

Crude oil storage has been in high demand in Canada, as production from Alberta's oilfields has  exceeded pipeline takeaway capacity and producers have limited transport options. Kinder Morgan Canada assets included in the sale are:

Asset	Capacity
Edmonton South Terminal	5,100 mbbl (storage)	15 tanks under long-term lease agreement from Trans Mountain. Storage capacity is contracted to 3rd parties in unregulated service (merchant tanks)
North Forty	2,150 mbbl (storage)	Merchant crude oil storage and blending services
Base Line Terminal	4,800 mbbl (storage)	Operated 50/50 joint venture with Keyera (six tanks placed into service through June, 2018; remaining six tanks will be placed into service by year-end 2018)
Edmonton Rail Terminal	210 mbpd (capacity)	Operated 50/50 joint venture with Imperial Oil (largest origination crude-by-rail terminal in North America)
Alberta Crude Terminal	40 mbpd (capacity)	Non-operated 50/50 joint venture with Keyera (fully contracted)
Vancouver Wharves	4.0 mmtpa bulk + 1,500 mbbl per year	Bulk commodity marine terminal provides handling, storage, loading and unloading services

This is an attractive transaction for (Kinder Morgan) KMI and (Kinder Morgan Canada) KML stockholders,” said Steve Kean, CEO of Houston-based Kinder Morgan. “It enables KMI to reduce leverage and gives us the flexibility to create additional value for shareholders through share buybacks, project investments, or both.”

The deal is expected to close late in the fourth quarter of 2019 or in the first quarter of 2020, subject to customary closing conditions, including KML shareholder and regulatory approvals.

Kinder Morgan's sale of Kinder Morgan Canada follows its $4.5 billion sale of the Trans Mountain Pipeline system and Trans Mountain Expansion Project to the government of Canada in August 2018.

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3:52:00 PM | 0 comments

Refinery Unit Owned By Pertamina Caught in Fire after Pipeline Repair

Balikpapan, Indonesia  (Pipeline-Engineer.com) A fire broke out in one of the pipes in the RU V Balikpapan refinery area, East Kalimantan, Thursday morning (8/15). Sparks were suspected to have arisen at around 9.30 WITA when the pipeline was repaired.

Fire fighting has been successfully carried out by Pertamina RU V using foam and water media, by deploying 4 units of fire trucks and 1 unit of trailer foam. According to the Manager of Region Communication Relations and CSR Pertamina MOR VI Kalimantan, Heppy Wulansari, the location of the fire has been localized and the main fire lane successfully extinguished.

Until the outage is complete there is no evacuation of workers and the blackout can be handled by the Pertamina team. "The cause of the fire is still awaiting the results of an investigation by Pertamina's internal team," he said.

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6:30:00 PM | 0 comments

Trafigura AG Has Started Shipments Through The New Cactus II Pipeline System.

Trafigura AG Trafigura AG said on Monday it has started shipments of Permian basin crude to the Corpus Christi oil hub in Texas via the new Cactus II pipeline system.

(Reuters) - Global commodities trader Trafigura AG said on Monday it has started shipments of Permian basin crude to the Corpus Christi oil hub in Texas via the new Cactus II pipeline system. 

Trafigura signed a long-term agreement with pipeline operator Plains All American Pipeline LP last year to transport a total of 300,000 barrels per day (bpd) of crude and condensate on the pipeline.The company will be shipping full contractual volumes on the line, which has a capacity of 670,000 bpd.

The Cactus II line is likely to see flows of about 300,000 bpd through August, and is likely to be near capacity by September, market sources have estimated. Trafigura is one of the biggest exporters of U.S. crude and routinely ships barrels overseas.



The Cactus II pipeline is the first of three large pipelines expected to start up this year from the Permian Basin, the biggest in the United States, and is expected to alleviate a bottleneck that had depressed regional prices for more than a year. 

 West Texas Intermediate (WTI) prices in Midland, Texas have strengthened to a premium compared with U.S. crude futures ahead of the pipeline's startup. On Monday, prices were seen at a premium of about 20-25 cents a barrel to futures, dealers said. As Midland crude strengthens to a premium, traders also expect the arbitrage window to ship barrels to Cushing, Oklahoma, the delivery point for U.S. crude futures, to eventually shut.

Prices in Cushing have rallied over the past two weeks, with U.S. crude futures' discount to Brent trading near $4 on Monday, the smallest since March 2018

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8:19:00 AM | 0 comments

BREAKING NEWS Tanks On Fire in Pecos Texas, USA. No Injuries reported

 

Tanks on Fire in Pecos TX, Accident happened when Oil truck caught fire between a bunch of oil tanks, until this article posted. No one injured in this acident. Keep Working safely.

Related Article : 

Trafigura AG Has Started Shipments Through The New Cactus II Pipeline System.

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9:58:00 AM | 0 comments

A Regional Gas Pipeline Ruptured Early Thursday in Kentucky, USA

JUNCTION CITY, Ky. (AP) — A regional gas pipeline ruptured early Thursday in Kentucky, causing a massive explosion that killed one person, hospitalized five others, destroyed railroad tracks and forced the evacuation of a nearby mobile home park, authorities said.

Some structures were completely consumed by the blaze, and five to seven people were unaccounted for when firefighters extinguished the flames hours later, Lincoln County Emergency Management Director Don Gilliam said.

"The part of the area that has been compromised, there's just nothing left," Gilliam said when asked whether residents might return to their trailer homes. "The residences that are still standing or damaged will be accessible. There doesn't really look like there's any in-between back there. They're either destroyed or they're still standing."

The 30-inch (76-centimeter) wide pipeline moves natural gas under such high pressure that the flames reached about 300 feet in the air and could be seen throughout the county, he said.

The explosion around 1 a.m. was so huge that it showed up on radar, according to a tweet from WKYT-TV meteorologist Chris Bailey. It took hours for firefighters to douse the flames, with trucks repeatedly refilling their tanks and returning to the scene.

Emergency managers said the rupture involved the Texas Eastern Transmission pipeline, which is owned and operated by Enbridge. The pipeline stretches more than 9,000 miles, from the Mexican border in Texas to New York City. A statement from the company based in Calgary, Canada, said "Enbridge is aware of and is responding to a rupture on the Texas Eastern system in Lincoln County."

The blast also damaged railroad tracks, forcing 31 trains to back up overnight, authorities said.

Some 75 people in the Indian Camp trailer park in the Moreland community were evacuated to the New Hope Baptist Church in Stanford. Gilliam encouraged anyone who fled the scene and hasn't been accounted for to check in at the church. Authorities also urged people gathering for the multistate 127 Yard Sale to stay away as crews worked to contain the damage.

Gilliam said residents whose homes are still standing should be allowed back in later in the day.

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A gas explosion rocked a community in Kentucky and left one person dead early Thursday, authorities said.

Authorities evacuated residents in Moreland after the explosion, the Lincoln County Sheriff's Office said. The number of people evacuated was not immediately available.

A shelter has been set up at a local church. The Perryville Fire Department said that preliminary reports show that a gas line ruptured.

Sofia Nunez was at home in Moreland, Kentucky, when the explosion happened.

"There was a loud noise and it sounded like a tornado was outside our house. When you stepped outside you could hear the flames and feel the heat. It shook the house for nearly 30 minutes after the flames appeared and neighbors windows were shattered," Nunez told CNN. Charlie Lynch, in Danville, woke up to the whole sky lit up from the explosion. He said he drove 10-15 minutes before taking video, with flames and smoke visible the whole way.

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5:37:00 PM | 0 comments