East Daley Analytics – Dissecting the Energy Value Chain
Energy Insights and News

Cureton Synergies in Action

Comments: 0

The Williams Companies’ (WMB) Cureton Front Range acquisition in Nov’23 included 260 miles of gas gathering and 60 MMcf/d of gas processing plant capacity (orange triangle in the map). A big part of the strategic rationale for acquiring the plant was downstream integration.

The Cureton plant was delivering NGL volumes down third party pipelines instead of its 50% owned Overland Pass Pipeline (OPPL) which delivers NGLs to its fractionation facility in Conway, Kansas (green star). Alternatively, WMB can ship Cureton-produced NGL volumes all the way down to the Mt. Belvieu NGL market (red star) via WMB’s Bluestem pipeline (yellow line) and Targa’s (TRPG) Grand Prix pipeline (orange line) to TRGP’s Cedar Bayou frac train 7, which WMB has a 20% interest in.

ngl infra 6.27ngl infra 6.27 2

 

WMB management noted in a Feb’24 call they were in the process of moving gas from a third-party plant to Cureton to capture NGLs for transportation on OPPL. We estimate Cureton produces ~12 Mb/d of NGLs, which translates to a $19MM annual gross revenue uplift on OPPL and Bluestem. The data supports the narrative as reflected in the figure below. According to FERC filings, Bluestem reported a 9 Mb/d increase in NGL throughput 4Q23 to 1Q24 and we expect the same increase in Targa’s Grand Prix Oklahoma volumes when they report their 1Q24 FERC financials on July 10th.

The bump in Bluestem volumes has also boosted Targa’s Grand Prix asset system volumes that have plateaued for Permian egress due to capacity constraints there. As East Daley discusses in its Capital Intelligence webinar this week, past and future transactions will rely on NGL capture for value-chain economics with exposure to international demand growth.—Rob Wilson, CFA Tickers: WMB, TRGP

Macro S&D: Now Selling Online!
A differentiated methodology using gas infrastructure to track production. Granular in basin production built up into a more accurate macro price forecast. Move beyond daily samples and get ahead of the marketPurchase or learn more about the Macro S&D here.

Sign Up for the Crude Oil Edge

East Daley’s Crude Oil Edge provides weekly updates on the US crude oil market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on crude oil flows, production growth, and import and export characteristics. Sign up now for the Crude Oil Edge. 

About the AuthorEast Daley Analytics

prev
Next

Upcoming Events

Dirty Little Secrets Part 2: Take Me to the Gulf

December 04, 2024

Register Here