US Williams, Targa to connect Conway, Mont Belvieu NGL hubs

Source: ICIS News

2019/02/13

HOUSTON (ICIS)--Williams and Targa Resources plan to build pipelines that will connect the two major US natural gas liquid (NGL) hubs in Conway, Kansas, and Mont Belvieu, Texas, the midstream companies said on Wednesday.

Under their agreements, Williams will build the Bluestem pipeline, which will stretch for 188 miles (300 km), they said. At one end will be a Williams fractionator in Conway and the southern terminus of the Overland Pass pipeline. At the other end will be an interconnect with Targa's Grand Prix NGL pipeline in Kingfisher county, Oklahoma, they said.

Targa will build a 100-mile extension of the Grand Prix, which will connect to Bluestem by passing through the Sooner Trend, Anadarko, Canadian and Kingfisher (STACK) region of central Oklahoma, they said.

Targa's Grand Prix extension will have an initial capacity of 120,000 bbl/day and should cost $200m, the companies said. The Grand Prix extension and Bluestem should start service in the first quarter of 2021.

Williams has natural gas processing complexes in Wyoming and Colorado, and the new pipelines will connect these plants to Mont Belvieu. In fact, the Overland Pass pipeline passes through those two states. The plants include Opal, Echo Springs, Willow Creek and Rocky Mountain.

As part of the project, Williams will expand the DJ Lateral of the Overland Pass pipeline and make improvements at its NGL storage in Conway, the companies said. Williams expects these projects will cost $350m-400m.

Williams will also have an initial option to buy a 20% stake in one of Targa's new fractionation trains in Mont Belvieu, the companies said. Those would be trains no 7 or no 8.

The access to Mont Belvieu will also provide Williams with a platform for growth, said Alan Armstrong, CEO.

Moreover, this access should extend to Williams' customers, he said.

Conway and Mont Belvieu are the largest NGL hubs in the US. Mont Belvieu provides ethane, propane and other NGLs to the petrochemical plants and export terminals along the Gulf coast.

NGLs are important to the US petrochemical industry because they are the predominant feedstock for the nation's crackers. The pipeline project will make more feedstock available to producers in the Gulf coast.

“We are very pleased to be working with Williams to enhance market access for NGLs,” said Joe Bob Perkins, chief executive officer of Targa. “The further expansion of our Grand Prix NGL Pipeline into the STACK is an attractive extension of a highly strategic asset for Targa and will direct significant incremental NGLs over the long-term from Williams and other third parties to Grand Prix and to our downstream assets in Mont Belvieu and Galena Park.”