Startup Permico joins crowded field looking to build Texas NGL pipelines
HOUSTON (Reuters) — Permico Energia LLC has become the sixth company in recent months to propose building a natural gas liquids pipeline from the nation's largest oil field in West Texas to market hubs a few hundred miles away.
|Photo courtesy of Permico Energia LLC.
The Houston-based midstream company plans to construct a 510-mi pipeline from the Permian Basin and Eagle Ford shale regions to Corpus Christi, a refining and fuels export center, beginning next year, said Jeffrey Beicker, co-founder and chief executive of Texas Permico Partners, a subsidiary of two-year-old Permico Energia.
The $1.8 B project would carry 330,000 bpd and includes a fractionator to separate ethane, propane and other liquids. It would also have an 8-MMbbl storage facility, and spurs to the Mont Belvieu, Texas, gas liquids storage and trading hub.
Operations could begin in late 2020, Beicker said in an interview this week. The company is in discussions with natural gas liquid (NGL) suppliers, which it declined to identify.
South Korean pension funds have provided $800 million in financing, with an additional $1 B in debt for the project to be raised by Japan's Sumitomo Mitsui Bank, Beicker said.
The system would compete with proposed NGL pipelines linking the Permian to Mont Belvieu announced by Energy Transfer Partners, Enterprise Products Partners, Targa Resources and others.
Beicker said his company would buy NGL from producers for its pipeline and storage facility.
"Additional infrastructure is needed to connect these energy hubs to support increasing petroleum exports from the US and key supply points," said Ed Longanecker, president of Texas Independent Producers and Royalty Owners Association.
Permian NGL production is forecast to top 1.7 MMbpd by the end of 2025, up from nearly 1 MMbpd now, according to a report compiled by oil and gas exploration data provider Drillinginfo Inc.
Permico's founding partners include former CBRE Inc head of energy infrastructure John Porter, former Defense Intelligence Agency officer Jeffrey Sykes and Beicker, who worked for Royal Dutch Shell Plc, Spark Energy Inc and Marlin Midstream.
Reporting by Ruthy Munoz; Editing by Lisa Shumaker
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