The Rover Pipeline is mechanically complete, and restoration work is on track to wrap up later this month, management for sponsor Energy Transfer Partners LP (ETP) said Thursday, pointing to incremental growth in throughput volumes for a project that has already lifted revenues for the Dallas-based midstreamer.
The 713-mile Rover’s Mainline B entered full service during the second quarter, raising total throughput capacity to the full 3.25 Bcf/d, with volumes typically hovering around 2-2.2 Bcf/d. Four supply laterals — Burgettstown, Majorsville, Sherwood and CGT — still require federal approval to enter service, and FERC has signaled its intent to withhold the remaining authorizations pending satisfactory completion of remaining restoration work.
During a joint conference call to discuss 2Q2018 results for ETP and general partner Energy Transfer Equity LP (ETE), CFO Tom Long said overall project restoration activities are now 99% completed for Rover, with final cleanup 81% complete and re-vegetation 78% complete.
“We expect to have all these restoration activities 100% complete this month,” Long said, noting that, having already submitted in-service requests for Burgettstown and Majorsville, Rover plans to file requests for the Sherwood and CGT lines by mid-August. “Our Revolution processing plant is complete, and we expect it to go into service once Rover has received full approval of the remaining supply laterals.”
The embattled Rover accounted for a $105 million boost to revenues for ETP’s interstate transportation and storage segment for the quarter, offset by an increase of $30 million in operating expenses and $7 million in selling, general and administrative expenses, according to the partnership.
Meanwhile, another embattled ETP-backed project, affiliate Sunoco Pipeline LP’s Mariner East 2 (ME2) natural gas liquids (NGL) pipeline in Pennsylvania, is on track to enter service by the end of September.
“We continue to make progress on ME2 with 99% of construction complete and 80% of hydrotesting complete,” Long said. In addition, all the project’s horizontal directional drills (HDD) “are completed or in process, in line with our approved HDD plan, with no more drilling re-evaluation reports required” by the Pennsylvania Department of Environmental Protection.
The Pennsylvania Public Utility Commission recently allowed construction to resume in West Whiteland Township in Chester County, and the operator plans to use an existing line “in the affected area for initial in-service,” Long said. “This plan does not require any new permits, and we have made all applicable regulatory notifications as a result.
“…This will allow us to bring sufficient capacity online to meet all of our initial contractual commitments.” Construction of ME 2X “also continues, and we expect the pipe to be online in mid-2019.”
Volumes were up year/year (y/y) across all of ETP’s segments for 2Q2018.
ETP’s interstate transportation and storage segment saw transported volumes increase sharply year/year to 8.7 million MMBtu/d in 2Q2018 from 5.3 million MMBtu/d. This included 1.7 million MMBtu/d from the partial in-service of Rover, as well as 654,000 MMBtu/d on Panhandle and 425,000 MMBtu/d on Trunkline. ETP also saw volumes increase on its Tiger pipeline (up 350,000 MMBtu/d) from production increases in the Haynesville Shale, and on its Transwestern Pipeline (200,000 MMBtu/d) thanks to “favorable opportunities” in the Midcontinent and the Permian Basin.
Revenues for the interstate transportation and storage segment increased to $330 million, up from $262 million in the prior-year period.
The intrastate segment also reported higher volumes, reaching 10.3 million MMBtu/d for the quarter from 9.3 million MMBtu/d in the year-ago period. ETP attributed the increase to favorable market pricing and an acquisition in April of the remaining interest in Regency Intrastate Gas LP.
ETP’s midstream segment saw gathered volumes increase y/y to 11.576 million MMBtu/d, up from 10.961 million MMBtu/d in 2Q2017. The segment produced 513,000 b/d of NGLs, up from 474,000 b/d of NGLs produced a year-ago.
The start-up of the Bakken pipeline and increased production from West Texas sent crude transportation volumes climbing y/y to just above 4.2 million b/d, up from slightly under 3.5 million b/d in the year-ago quarter.
ETE, which recently announced plans to merge with limited partner ETP, reported net income of $355 million (31 cents/unit) in the second quarter, versus year-ago net income of $212 million (19 cents). Revenues totaled $14.118 million, up from $9.427 million in 2Q2017. ETP’s 2Q2018 net income y/y totaled $602 million from $375 million.
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