The hottest areas of production in our state – the STACK, SCOOP, and Merge plays have dominated the Oklahoma rig count for nearly 2 years now. In today’s market, the ever-increasing flows of oil, condensate, natural gas and natural gas liquids from the Meramec and Woodford shales are creating attractive economics for producers to expand. As a result, the need for takeaway capacity has never been greater. Natural gas and Natural Gas Liquids takeaway is key to keeping oil production on track in high growth areas such as STACK/SCOOP/Merge. Over the past year, a few new pipeline projects that have come online are carrying oil to market rather than the produced natural gas. To ensure uninterrupted oil flows and maximize production, investments in natural gas takeaway will be imperative. And, from all appearances, it looks like the industry has answered the call with a flurry of new or expanding gas pipeline and processing projects. In this article, we’ll touch on the recently completed pipeline projects around our state and I’ll bring you up to date on the new or planned projects designed to move natural gas to our regional hubs.
Recently completed projects
Glass Mountain Pipeline (GMP) – Late last year, Navigator Energy Services purchased the GMP from SemGroup Corporation and NGL Energy Partners for $600 million and almost immediately began expanding the pipeline system deeper into the heart of the STACK. The $60-million pipeline extension came online in February 2018, as did a 250-Mbbl expansion of GMP’s Cushing storage facility that increased the total capacity there to about 1.8 MMbbl. Navigator says it’s planning additional capacity and extent of the GMP.
Though heavily focused on their operations in the Permian Basin, Plains All American and Phillips 66 Partners completed a small project in Oklahoma, expanding the pipeline between their Cashion storage terminal in Kingfisher County and their hub in Cushing. The STACK-based project added 150 million barrels per day (Mb/d)of additional capacity to the previous 100 Mb/d capacity. According to the companies, capacity could be boosted another 100 Mb/d by deploying additional pumps on the system.
Velocity Midstream recently completed an extension to its 45-mile mile pipeline running through the SCOOP fairway. The 22-mile addition stems from the expanded production commitments of Continental Resources and refiner, CVR, whose operations are in Wynnewood, OK. The new addition will connect production from the Merge core to the Velocity’s primary SCOOP pipeline system. The enhanced pipeline system allows producers to separate lighter and heavier crude oil carries SCOOP condensate resulting in higher quality segregated delivery of lighter crudes and condensates to market hubs.
Projects in progress
In each of the last 2 weeks, 2 new pipeline expansion projects (one oil, one gas) have been announced with the purpose of boosting takeaway capacity in the STACK/SCOOP/Merge. The following list of new pipeline projects demonstrate a clear focus on moving natural gas to ensure uninterrupted supplies of oil to market. Of the projects listed, all but one is a natural gas project. But, it’s not just about moving gas to market, it’s also about expanding gathering and processing capabilities. All totaled, these projects will move or process an additional 1.1 BCF or more per day of gas.
In mid-April, Canyon Midstream brought it’s Redcliff Plant, a 200 MMcf/day cryogenic gas processing facility, online. The plant, located in Woodward County, Oklahoma will process gas emanating from core STACK counties via it’s extensive Redcliff Gathering System. According to the company, the system serves producers within a 57,000-acre area across the volatile oil, condensate, and wet gas windows of the STACK. Aside from processing gas, the new plant will provide producers access to gas markets via the ANR and Southern Star Central gas transportation pipelines. The Redcliff Plant could potentially undergo further expansion later this year adding another 200 MMcf of capacity if warranted.
Enable Midstream’s Project Wildcat, a 140-mile gas pipeline, is due to become operational in June of this year. But before the first gas entered the pipeline, an additional 400 MMcf/day was contracted by Continental Resources to move produced gas from its STACK and SCOOP operations. Project Wildcat was originally designed to move wet gas from the STACK core to Energy Transfer Partner’s processing facility Johnson County, Texas and eventually provide gas to power plants, LNG terminals, and pipelines serving Mexico.
Enable is also at work on its Cana and STACK Expansion (CaSE) project, adding 205 MMcf/d of wet gas takeaway on the Enable Gas Transmission system and the Enable OK Intrastate Transmission system. According to Enable, CaSE uses existing and expansion facilities, as well a capacity on third-party pipelines, to transport rapidly growing production volumes in the Cana, STACK, and SCOOP. The company estimates the CaSE system will provide more than 400,000 dekatherms or 1,000,000 MMbtu per day of takeaway capacity. Expected completion of the project is in Q4 of this year.
ONEOK is currently involved in numerous gas and NGL-related projects in Oklahoma aimed at various aspects of oil and gas production, processing, and takeaway. I’ll focus just on the projects focused on STACK and SCOOP here, but if you want to learn more check out the company’s April 2018 Investor Update HERE.
ONEOK has secured firm producer commitments for an expanded gas transmission link moving 100 MMcf/d out of the STACK. The project can be further enhanced, if needed, with the addition of compression equipment and is expected to be operational sometime this quarter. The company’s Sterling III pipeline is also adding capacity with a 60 Mb/d expansion. The pipeline transports mixed natural gas liquids (NGL’s) from Grant County, Oklahoma to ONEOK’s fractionation and storage facilities in Mont Belview on the Texas Gulf Coast.
ONEOK’s largest Oklahoma pipeline project, the Arbuckle II, is a 530-mile pipeline with 2-3 feet of diameter and a capability of transporting 400 Mb/d of mixed NGL’s from the STACK/SCOOP/Merge to its Mont Belview facility. The project has secured 50% of the commitments needed from producers and can be expanded to move up to 1 MMb/d of NGL’s as growth in the area continues. Arbuckle II is expected to come online the first quarter of 2020. Finally, ONEOK is adding a second processing plant with a 200 MMcf/d capacity at its Canadian Valley complex in Canadian County. The project is anticipated to be in operation towards the end of this year.
Cardinal Midstream announced the Iron Horse gathering and processing system back in February of this year, but due to production surges in the Anadarko Basin production areas, the company announced an expansion project earlier this month. Acreage dedications totaling nearly 250,000 acres by Camino Natural Resources and Travis Peak Resources led Cardinal to expand its footprint 50 miles to serving the STACK/SCOOP/Merge plays. According to the company, the 100-mile Iron Horse gathering system is currently under construction while the plant is slated to be online late summer or early fall. The Iron Horse Plant will be a modern cryogenic processing facility located in Grady County, Oklahoma and is expected to process 200 MMcf/day of natural gas.
Last week, Kingfisher Midstream (KFM) and Blueknight Energy Partners announced the Cimarron Express, a 65-mile long crude oil pipeline serving the STACK. Initially, the pipeline will carry 90,000 barrels of oil daily from northeastern Kingfisher County to Blue Knight’s crude oil terminal in Cushing. The Cimarron Express is to be operational by mid-2019. Alta Mesa, who recently acquired, KFM, has dedicated 120,000 net acres of Kingfisher and Garfield county production to the new project.
In a future article, we’ll check in on the progress of these projects and any additional ones that may have been recently announced. Feel free to reach me at [email protected], I’m always ready to help.
Julie Parker has a decade of experience serving the Energy industry where she became an expert in the integration and application of geospatial technologies to exploration and production projects and workflows. Ms. Parker entered the industry in 2006 when she became the first GIS Director for Chesapeake Energy, a large independent producer of natural gas headquartered in Oklahoma City, Oklahoma with operations throughout the U.S. During her tenure at Chesapeake, Ms. Parker built and lead a robust, cross-functional GIS department that gained a reputation for developing and deploying leading edge solutions for nearly all areas of the company.