With so many new projects announced in 2014, the race was on as to who would secure sufficient firm commitments from shippers. In light of current shipper demand, midstream operators approached 2015 by reconsidering construction projects in areas facing stiff competition from other announced projects.
Enterprise Products Partners LP canceled construction of the crude oil pipeline it announced last June, planned from the Bakken Shale in North Dakota to the trading hub in Cushing, Okla., due to insufficient commitments from shippers during its extended open season. Andy Lipow, president of Lipow Oil Associates LLC in Houston, told Bloomberg that Enterprise’s decision was “not really surprising, given the other competing pipeline projects that are under way to deliver oil out of the Bakken.” Those other projects add up to an additional “1 million barrels a day of takeaway capacity out of the Bakken, which really makes the Enterprise project questionable,” he said.
The Alaska Stand Alone Pipeline, a 727-mile, 36-inch natural gas pipeline planned by Alaska’s independent, public corporation Alaska Gasline Development Corp., has been put on hold while the state faces a $3.5 billion budget deficit. The pipeline would extend from a planned 500 million cubic feet per day gas conditioning facility near Prudhoe Bay to a connection with the existing ENSTAR Pipeline in the Matanuska-Susitna Borough, near Anchorage.
The project has not been canceled, though the Alaska Dispatch reported that Gov. Bill Walker said during his 2014 campaign that he would stop funding to the project, calling it a costly redundancy to the state’s Alaska LNG project.
According to a motion it filed with the Federal Energy Regulatory Commission (FERC), Excelerate Energy LP has asked the regulatory agency to temporarily suspend consideration for its Lavaca Bay LNG export project until April 1, at which time it would provide an update. The project also sought abeyance for previous FERC data requests until that time.
In the filing, Excelerate wrote that “recent global economic conditions,” including “a steep decrease in the price of oil,” have “created uncertainty regarding the economics of the project.”
Caryn Livingston can be reached at clivingston@hartenergy.com or 713-260-6433.
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