Profile: Midcoast Energy Partners LP (MEP.N)
28 Aug 2015
Midcoast Energy Partners, L.P., incorporated on May 30, 2013, is a natural gas and natural gas liquids (NGL) midstream company operating in the United States. The Company is publicly traded growth-oriented Delaware limited partnership that serves as Enbridge Energy Partners, L.P.’s (EEP’s) primary vehicle for owning and operating its natural gas and NGL midstream business in the United States. The Company operates through two segments: Gathering, Processing and Transportation, and Logistics and Marketing. The Company’s gathering, processing and transportation segment is engaged in gathering, processing and transporting natural gas and NGL. The logistics and marketing segment primarily markets natural gas, NGLs and condensate.
The Company owns 51.6% controlling interest in Midcoast Operating, L.P. (Midcoast Operating), a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas processing and treating facilities, and NGL fractionation facilities primarily located in Texas and Oklahoma. It also owns 100% of Midcoast Operating’s general partner. Midcoast Operating also owns and operates natural gas, condensate and NGL logistics and marketing assets that primarily support its gathering, processing and transportation business. The Company’s business consists of gathering unprocessed and untreated natural gas from wellhead locations and other receipt points on its systems, processing the natural gas to remove NGLs and impurities at its processing and treating facilities, and transporting the processed natural gas and NGLs to intrastate and interstate pipelines for transportation to various customers and market outlets. In addition, the Company markets natural gas and NGLs to wholesale customers. The Company provides customers with a wellhead-to-market service from its systems to energy market hubs in the Gulf Coast and Mid-Continent regions of the United States.
Midcoast Operating’s primary operating assets include approximately 11,100 miles of natural gas gathering and transportation lines, and approximately 233 miles of NGL gathering and transportation lines; a 35% interest in the Texas Express NGL system, which is comprised of two joint ventures with third parties that together own a 593 mile, 20-inch NGL intrastate transportation pipeline extending from the Texas Panhandle to Mont Belvieu, Texas, and a related NGL gathering system that consists of approximately 116 miles of gathering lines; around 18 active natural gas processing plants, including two hydrocarbon dewpoint control (HCDP) facilities with a combined capacity of approximately 1.6 billion cubic feet per day (Bcf/d), including 350 million cubic feet per day( MMcf/d) provided by its HCDP plants; eight active natural gas treating plants, including three that are leased from third parties, with a total combined capacity of approximately 0.9 Bcf/d; approximately 545 compressors with approximately 792,000 aggregate horsepower, the majority of which are owned by Midcoast Operating and the remainder of which are leased from third parties; a liquids railcar loading facility near Pampa, Texas, which is refered to as the TexPan liquids railcar facility; an approximately 40-mile crude oil pipeline and associated crude oil storage facility near Mayersville, Mississippi, including a crude oil barge loading facility located on the Mississippi River; and approximately 225 transport trucks, 370 trailers and 190 railcars for transporting NGLs.
Gathering, Processing and Transportation
The Company’s gathering, processing and transportation business includes natural gas and NGL gathering and transportation pipeline systems, natural gas processing and treating facilities, and NGL fractionation facilities. The Company gathers natural gas from the wellhead and central receipt points and delivers to its facilities for processing and treating, and delivers the residue gas to intrastate or interstate pipelines for transmission to wholesale customers, such as power plants, industrial customers and local distribution companies. The Company delivers the NGLs produced at its processing and fractionation facilities to intrastate and interstate pipelines for transportation to the NGL market hubs in Mont Belvieu, Texas and Conway, Kansas. In addition, it delivers NGLs from certain of its facilities to the Texas Express NGL system for transportation on the Texas Express NGL mainline to Mont Belvieu, Texas.
The Company’s gathering, processing and transportation business consists of the following four systems: Anadarko system, consisting of approximately 3,100 miles of natural gas gathering and transportation pipelines, approximately 60 miles of NGL pipelines, seven active natural gas processing plants, five standby natural gas processing plants and one standby treating plant located in the Anadarko basin; East Texas system, approximately 4,100 miles of natural gas gathering and transportation pipelines, approximately 144 miles of NGL pipelines, four active natural gas processing plants, including two HCDP plants, seven active natural gas treating plants, two standby natural gas treating plants and one fractionation facility located in the East Texas basin; North Texas system, approximately 3,900 miles of natural gas gathering and transportation pipelines, approximately 29 miles of NGL pipelines, and seven active natural gas processing plants located in the Fort Worth basin, and Texas Express NGL system, a 35% interest in an approximately 593-mile NGL intrastate transportation mainline and a related NGL gathering system that consists of approximately 116 miles of gathering lines. The Company also has an approximately 40-mile non-core propylene pipeline extending from Exxon’s refinery in Chalmette, Louisiana to an interconnecting Chevron pipeline near Lafitte, Louisiana.
The Company’s Anadarko system includes production from the Granite Wash tight sand formation. Productive horizons in the Granite Wash play include the Hogshooter, Checkerboard, Cleveland, Skinner, Red Fork, Atoka and Morrow formations. The Company also owns the Ajax processing plant, a cryogenic processing plant. The Anadarko system has numerous market outlets for the natural gas that the Company gathers and processes, and NGLs and condensates that are recovered on its system. The Company has connections to major intrastate and interstate transportation pipelines that connect its facilities to major market hubs in the Mid-Continent and Gulf Coast regions of the United States. The NGLs produced at the Anadarko system processing plants are transported by pipeline to third-party fractionation facilities and NGL market hubs in Conway, Kansas and Mont Belvieu, Texas.
The East Texas system gathers production from the Cotton Valley Lime and lean Bossier Shale plays, which are located on the western side of its East Texas system; the Haynesville/Bossier Shale plays, which run from western Louisiana into East Texas; the Cotton Valley Sand formation, which also runs from western Louisiana into East Texas and condensate on the eastern side of its East Texas system, and the Eaglebine play, which spans five counties in East Texas and is comprised of multiple drilling zones crossing through the Woodbine and Eagleford formations. The East Texas basin also includes multiple other natural gas and oil formations that are frequently explored, including the Woodbine, Travis Peak, James Lime, Rodessa, and Pettite. The East Texas system has numerous market outlets for the natural gas that it gathers and processes, and NGLs and condensate that is recovered on its system.
The North Texas system is primarily engaged in natural gas production in the Barnett Shale play within the Fort Worth basin. The Texas Express NGL system consists of the production from the Rockies, Permian basin and Mid-Continent regions that are delivered to the Texas Express NGL system utilizing Enterprise Products Partners’ existing Mid-America Pipeline between the Conway hub and Enterprise Products Partners’ Hobbs NGL fractionation facility in West Texas. In addition, the Company also has to the production from the system through the Front Range Pipeline, which is owned by Enterprise Products Partners, DCP Midstream and Anadarko Petroleum Corporation.
Logistics and Marketing
The primary role of the Company’s logistics and marketing business is to market natural gas, NGLs and condensate received from its gathering, processing and transportation business. Its logistics and marketing business purchases and receives natural gas, NGLs and other products from pipeline systems and processing plants, and sells and delivers them to wholesale customers, such as distributors, refiners, fractionators, utilities, chemical facilities and power plants.
The physical assets of the logistics and marketing business primarily consist of approximately 225 transport trucks, 370 trailers and 190 railcars for transporting NGLs; its TexPan liquids railcar facility near Pampa, Texas, and an approximately 40-mile crude oil pipeline and associated crude oil storage facility near Mayersville, Mississippi, including a crude oil barge loading facility located on the Mississippi River. The Company also has agreements with various third parties to obtain natural gas and NGL supply, transportation, gas balancing, fractionation and storage capacity in support of the logistics and marketing services provided to its gathering, processing and transportation business and to third-party customers. Its agreements provide logistics and marketing business with the following: up to approximately 79,000 Bpd of firm NGL fractionation capacity; approximately 3.5 Bcf of firm natural gas storage capacity; approximately 0.75 Bcf of interruptible natural gas storage capacity; up to approximately 30,000 Bpd in 2014 to 120,000 Bpd in 2022 of firm NGL transportation capacity on the Texas Express NGL system; up to approximately 89,000 Bpd of additional NGL transportation capacity, a portion of which is firm capacity, through transportation and exchange agreements with three NGL pipeline transportation companies, and approximately 6.0 million barrels of liquids, or MMBbls, of firm NGL storage capacity. The customers of its logistics and marketing business are wholesale customers, such as refiners and petrochemical producers, fractionators, propane distributors and industrial, utility and power plant customers.
The Company’s logistics and marketing business also uses third-party storage facilities and pipelines for the right to store natural gas and NGLs for various periods of time under firm storage, interruptible storage or parking, and lending services. The Company also contracts for third-party pipeline capacity under firm transportation contracts for which the pipeline capacity depends on volumes of natural gas from its natural gas assets. The Company contracts the pipeline capacity for various lengths of time and rates. It also has multiple long-term fractionation contracts with third-party fractionators to provide access to fractionation capacity for its customers.
Midcoast Energy Partners LP
1100 Louisiana St Ste 3300
HOUSTON TX 77002-5216