Oil & Gas News

Oil and natural gas drillers will be helped by gains in pipeline capacity from Oklahoma’s SCOOP and STACK plays


Work continues on pipeline projects designed to carry oil, condensate and natural gas away from wells being completed in Oklahoma’s STACK and SCOOP plays.

An analyst and those midstream operators say the projects have been a long time in coming, and that they expect their completions to boost the continued development of those areas for years to come.

“What we call the STACK was first explored in 2009, in a very limited degree, in the Cana Woodford,” said Ben Chu, manager of equity products with Genscape, Inc. “It certainly has expanded, both in area, and also in the numbers of formations they are producing from.”

Chu agrees added takeaway capacity will continue to propel drilling momentum within the plays. In October, the Cana Woodford became the second-most active field in the Lower 48, behind the Permian Basin. The field held that position until earlier this month, when the number of working rigs in the south Texas Eagle Ford Shale edged higher.

Chu added he expects the additional takeaway capacity will be needed, in part because drillers are considering downsizing their wells to boost production, and in part because he believes continued production growth in the Permian Basin will put pressure on existing pipelines and plants handling oil, condensate and natural gas within the Mid-Continent.

“That will exacerbate the need for takeaway capacity,” he said.

Projects underway

ONEOK Inc. is expanding the capacity its Sterling III pipeline, which carries natural gas liquids from Medford to its storage and fractionation plant at Mont Belvieu, Texas, from 190,000 to 250,000 barrels per day.

The company also is connecting its Arbuckle Pipeline to its Cajun-Sibon Pipeline in southeast Texas. Both projects, which cost $130 million combined, are expected to be completed by the end of next year.

ONEOK also building a 30-mile-long natural gas gathering pipeline, a $40 million project expected to be finished by the end of this year, to support an expansion it is working on at its Canadian Valley natural gas processing plant in Calumet.

Company officials have said the Canadian Valley expansion will add 200 million cubic feet of natural gas and 20,000 barrels per day of natural gas liquids capacity by 2019. The company is spending about $165 million for that work.

Enable Midstream Partners continues to work on numerous projects, as well. Its Project Wildcat pipeline will move 400 million cubic feet per day of natural gas production in Oklahoma to north Texas, where it can be moved to intrastate natural gas markets, and is expected to be operational in mid-2018.

Plus, the company also is working on a Cana and STACK Expansion pipeline project, designed to transport up to 205,000 thousand cubic feet of natural gas a day produced by Newfield Exploration Co. wells by the end of next year.

Tulsa-based SemGroup expects its Canton Pipeline to be operational by the end of this year. The line connects the company’s Rose Valley plant in Woods County to Blaine County in the STACK play. The company said it initially would transport up to 200 million cubic feet per day, with the ability of expanding it to 400 million cubic feet per day.

Meanwhile, Velocity and CVR have said two of their subsidiaries would form a joint venture to build a pipeline and terminal linking the fairway of the South Central Oklahoma Oil Province to the Wynnewood refinery in Garvin County.

One about to begin

Another project likely to have a lasting impact on Oklahoma’s SCOOP and STACK plays is Cheniere Energy’s Midship Pipeline.

The line will start in Kingfisher County and extend south and east through the South Central Oklahoma Oil Province to Bryan County, where it will link to an existing pipeline.

Cheniere continues to grow. In December, its daily exports were running 3.2 billion cubic feet from its Sabine Pass terminal, where its working on building a fifth export train.

Plus, the company continues to build a two-train export facility in Corpus Christi, Texas, which it expects to become operational in 2019.

As for the Midship Pipeline, the company has been meeting with landowners, area fire officials and other stakeholders for about a year, and also has made numerous donations supporting local fire departments in areas near the line’s projected path.

The company is seeking Federal Energy Regulatory Commission approval for the project in mid-2018, and hopes to have the project operational about a year from now.

Mike Manteris, Cheniere’s vice president of upstream infrastructure, said this week there’s no doubt the company sees future growth in the basin, and that its deal marries an abundant supply of natural gas with its need for a diverse supply of fuel to export from its LNG terminals.

“Midship is our first step out into a basin,” Manteris said, adding that it’s beneficial both for the exporter and its customers because it eliminates potential middlemen that might have been needed to move the fuel before.

As for the community meetings, both Manteris and Eben Burnham-Snyder, the company’s vice president of communications, said they’ve been beneficial for everyone involved.

Along the way, the company’s learned about potential issues the pipeline could pose for landowners and from a safety standpoint, and Burnham-Snyder stressed it’s always easier to address those problems before construction starts.

“That’s how you get a project done the right way,” he said.

SOURCE: NewsOK.com by Jack Money

Compiled and Published by GIB KNIGHT

Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.

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