American Midstream announces Cayenne Pipeline JV
HOUSTON — American Midstream Partners, LP announced it has entered into a JV agreement between AMID and Targa Midstream Services LLC creating Cayenne Pipeline, LLC. Cayenne will transport Y-grade NGLs from the Targa-operated Venice Energy Services Company, LLC gas processing plant to Enterprise Products’ pipeline at Toca, Louisiana, for delivery to Enterprise Products’ Norco Fractionator.
As part of the Cayenne joint venture, AMID is contributing an underutilized natural gas pipeline that will convert into high value, natural gas liquids service. The project is supported by a 15-yr dedication for all NGL production from Targa’s 750 MMcf/d Venice plant with inlet from six offshore pipelines in the Gulf of Mexico, including the prolific deep-water Mississippi Canyon area.
The pipeline will have initial capacity of over 40,000 bpd with the ability to throughput more than 50,000 bpd. AMID and Targa will each have 50% economic interests and 50% voting rights, respectively, with Targa serving as the operator of the venture. The costs of conversion and associated construction will be shared equally by AMID and Targa.
The project has received necessary change of service permits and is expected to be fully operational by year-end 2017. The JV is expected to be brought into service at a highly attractive cash flow multiple that is consistent with AMID’s strategy of allocating capital and increasing scale to accretive projects without the need for external capital.
At CERAWeek by IHS Markit, held in Houston in March, IEA Director Fatih Birol said that the world would soon see a major second wave of shale gas production from the US in response to higher energy prices and growing demand from India and China.
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May 22, 2018 10am CDT