Intrastate Pipelines - A Permian Relief Valve
The focus of the webinar we held earlier this month with our friends at Energy Aspects was on the Permian Basin and addressed how the associated gas that is produced along with the oil may be impacting the production of crude from that basin. As we discussed during the webinar, there are a number of key permitting filings that offer visibility into the progress of new pipeline capacity buildout from the region, usually through intrastate pipelines, which we continue to follow.
In addition to our growing analysis of Texas intrastate pipeline projects, our customers also have access to information about how approximately 100 intrastate pipelines are providing interstate service to ease capacity constraints. As the screenshot from our platform below shows, existing intrastate natural gas pipelines, such as Apache Corporation's Alpine High Pipeline, can provide a substantial amount of interstate service. This activity should be monitored by those who are trying to determine basin pricing, as well as those who are concerned about gas takeaway capacity constraining oil production or are on origination teams looking to spot competitive opportunities.
Contractual Commitments on Select Permian Pipelines
In addition to Alpine High Pipeline, reflected above, two other Permian pipelines began providing substantial levels of interstate service contract flows over the last year.
| Pipeline | Q1 2018 | Q4 2017 | Q3 2017 | Q2 2017 |
|---|---|---|---|---|
| Alpine High Pipeline LLC | 8,434,710 | 3,793,833 | 56,464 | 0 |
| Trans-Pecos Pipeline, LLC | 2,126,771 | 14,804 | 309,551 | 0 |
| Comanche Trail Pipeline, LLC | 2,886,463 | 404,801 | 76,464 | 0 |
| Average Dth/day | 147,780 | 46,302 | 4,862 | 0 |
Both Comanche and Trans-Pecos are owned by Energy Transfer Partners and entered into service in 2017. Both of these pipelines were designed to supply gas to Comision Federal de Electricidad, Mexico's federal electricity commission, through its United States affiliate, CFE International LLC.
An apparent beneficiary of this new capacity coming into service is Apache Corporation and its affiliated pipeline, Alpine High Pipeline. Apache's contracted volumes on Alpine High to the Comanche Pipeline Interconnect went from an average of 620 dth/day in the third quarter of 2017, to 41,690 dth/day in the fourth quarter of 2017, to 92,689 dth/day in the first quarter of this year. All of this increase was transported as authorized overrun under the Alpine High tariff, which requires payment only for the volumes transported at a price of $.13/dth.
Our customers can monitor the changing interstate flows on these intrastate pipelines on a quarterly basis and can quickly identify the pipelines that serve a particular basin.
Insights Coming Soon
Benchmarking standard project costs measures
Update on oil tariff disputes and regulatory challenges
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Rover's Over Budget, Sabal Trail's Under - Detailed Pipeline Contractor Cost Data