Energy Transfer Prepares to Place Major Growth Projects into Service, Begin New Ones

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Researched by Industrial Info Resources (Sugar Land, Texas)--With growing oil and gas production throughout the U.S., particularly in the Permian Basin and Marcellus and Utica shales, midstream operator Energy Transfer Partners LP (NYSE:ETP) (Dallas, Texas) is preparing to place several growth projects into service this year and is beginning construction on new ones. In the company's recent first-quarter earnings conference call, Chief Financial Officer Tom Long discussed major projects, including the Mariner East 2 natural gas liquids (NGL) pipeline in the Marcellus area and a new crude oil pipeline in Texas. Industrial Info is tracking more than $15.3 billion in active Energy Transfer projects.

Energy Transfer's $4.2 billion Rover NGL pipeline, when complete, will transport 3.25 billion cubic feet per day (Bcf/d) of natural gas from the Marcellus and Utica shales to markets throughout the U.S. and in Ontario. Long said that last week the U.S. Federal Energy Regulatory Commission (FERC) gave approval for additional Rover facilities to be placed into service, allowing for approximately 75% of Rover's capacity to be in service. Long said, "Construction of the full project is nearing completion. All HDD [horizontal directional drilling] crossings have been completed, and we are progressing with final hydrostatic testing and tie-in work to achieve mechanical completion and expect to ask FERC to place the rest of the 3.25 Bcf/d project into service by June 1." Among the segments of the pipeline that need to be wrapped up are those in West Virginia. For more information, see Industrial Info's project report on a pipeline lateral in West Union, West Virginia.

Long said the company's 440 million-cubic-foot-per-day Revolution natural gas processing plant in Bulger, Pennsylvania, was complete and would begin production once all Rover facilities were in operation. Construction on the $250 million plant began in the summer of 2016, with ISTI Plant Services Incorporated (Tulsa, Oklahoma) providing engineering, procurement and construction. For more information, see Industrial Info's project report.

Energy Transfer's Mariner East 2 (ME2) and 2X projects will include two parallel 346-mile pipelines to transport 273,000 barrels per day (BBL/d) of NGL from the Marcellus and Utica shales to the company's terminal in Marcus Hook, Pennsylvania. Mariner East 2 is expected to be completed first. Long said, "We continue to make progress on the construction of ME2, with 98% of mainline construction complete and 93% of HDDs completed or underway. At this time, we expect to place ME2 into service in the third quarter of 2018. Construction on ME2X also continues, and we expect the pipe to be online in mid-2019." For more information, see Industrial Info's project report.

As with other midstream operators in the Permian Basin, output growth is causing a strain on available processing and takeaway capacity. "Due to continued strong demand in the Permian, we are nearing capacity in both the Delaware and Midland basins. As a result of this demand, we are building a second 200 million-cubic-foot-per-day cryogenic processing plant near our existing Arrowhead plant, and this plant is expected to be in service in the fourth quarter of this year." Construction on the $150 million plant began late last year and will bring total Arrowhead capacity to 400 million cubic feet per day. For more information, see Industrial Info's project report.

Long said the company also was progressing with plans to construct a 30-inch-diameter crude oil pipeline from Midland to Nederland in Texas. The pipeline will have extensions to the Houston Ship Channel. "The project is expected to initially transport up to 600,000 BBL/d of capacity, easily expandable to 1 million BBL/d. This new pipeline will provide unprecedented flexibility to the expansive Ship Channel markets, as well as to significant markets and the refinery corridor in the Nederland/Beaumont areas," said Long. For more information, see Industrial Info's project report.

Long said work is progressing with Energy Transfer's Phase II expansion of its Bayou Bridge pipeline in Louisiana. The first phase runs from the company's terminal in Nederland to Lake Charles, Louisiana, which Long said carried an average of 160,000 BBL/d in the first quarter. Phase II consists of a 24-inch-diameter segment from Lake Charles to Saint James, Louisiana. Construction began earlier this year, and the pipeline addition is expected to begin commercial operations in the fourth quarter of this year. For more information, see Industrial Info's project report.

At the company's processing facility in Mont Belvieu, Texas, Energy Transfer is underway with construction of a fifth and sixth fractionator train, as well as a 3 million-barrel NGL storage cavern. The fifth train is expected to be online in the third quarter of this year, followed by Train 6 in the second quarter of 2019. Train 5 will add 120,000 BBL/d of fractionation capacity, and Train 6 will add 140,000 BBL/d. For more information, see Industrial Info's project reports on Train 5, Train 6 and the storage cavern.

Energy Transfer reported first-quarter 2018 net income of $879 million, which was up $486 million from the same period last year due to increased operating income.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.