Title : Andeavor To Invest $150 Million In NGL Logistics Hub -- Gathering, Processing, Transporting -- February 19, 2018
link : Andeavor To Invest $150 Million In NGL Logistics Hub -- Gathering, Processing, Transporting -- February 19, 2018
Andeavor To Invest $150 Million In NGL Logistics Hub -- Gathering, Processing, Transporting -- February 19, 2018
A reader alerted me to this story with a comment at an earlier post, and just minutes ago, another reader sent me the link. Huge story -- thank you to those noting it and letting me know.From a news release from Andeavor Logistics:
North Dakota NGL Logistics Hub. Andeavor Logistics today (February 16, 2018) announced its intent to build and operate the North Dakota Logistics Hub to further participate in the natural gas liquids (NGL) value chain and provide logistics solutions for increasing Bakken NGL production.
The project will convert a segment of the Andeavor Bakkenlink crude oil pipeline into NGL service to enable the movement of mixed NGLs from a new third-party gas processing facility in central McKenzie County, North Dakota to a newly expanded fractionation complex at the Andeavor Logistics Belfield processing facility. [Comment: there's a lot packed into that once sentence.]
From the fractionation complex, products will be shipped to the nearby Andeavor Fryburg rail terminal for manifest and unit train rail movements and will be consumed within Andeavor's refineries as well as marketed, including international markets, by Andeavor.
Project volumes are supported by a long-term gas processing facility dedication and minimum volume commitment. The estimated capital investment is expected to be $140 to $150 million and partial commercial operations are estimated to begin in late 2018, with full operations commencing in the first quarter of 2019.
The project is expected to deliver annual net earnings of $15 to $19 million and $22 to $26 million of annual EBITDA, representing a 6 to 7 times multiple.Andeavor was previously known at Tesoro, a company based in San Antonio, TX. I'm having trouble getting used to the name change.
Comments:
- this supports my thesis that companies like Andeavor aren't spending 100's of millions of dollars in the Bakken if they thought it was a dying field. I think there is more to the Bakken than most folks realize
- this is another advantage of a relatively small geographic footprint: the Bakken may extend well into Canada, and a ways into Montana and South Dakota, but for the most part, the center of activity is in a very small geographic area; we're not talking a 100-mile pipeline to connect a lot of these new projects, something that would be required in the Permian, as just one example
- it's great to see all that CBR (crude-by-rail) being re-engineered to CPBR (crude products by rail); I think a lot of folks, including me, were anxious about that excess capacity being wasted (I'll still refer to it as CBR, for now)
- the other nice thing about this project: it's down in the southwest part of the state, taking some pressure off the Killdeer-Watford City- Williston axis
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