Blackcomb Pipeline gets final investment decision By Mella McEwen
Blackcomb will source natural gas from multiple Permian Basin connections, including gas processing facilities in the Midland Basin and the Agua Blanca Pipeline in the Delaware Basin.
Blackcomb Pipeline gets final investment decision
By Mella McEwen, Oil EditorAug 10, 2024
Takeaway constraints that have sent Permian Basin natural gas prices into negative territory may soon come to an end. On the heels of the announcement that the Matterhorn Express pipeline will be entering service this fall comes word that a final investment decision has been made to build the Blackcomb Pipeline.
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WhiteWater, MPLX and Enbridge, through the WPC Joint Venture that owns the Whistler Pipeline, are partnering with an affiliate of Targa Resources to build the 2.5 billion cubic foot, 365-mile 42-inch line from the Permian Basin to the Agua Dulce area in South Texas.
The developers proceeded with the project after securing enough firm transportation agreements with shippers including Diamondback Energy, Devon Energy, Marathon Petroleum and Targa Resources.
Blackcomb will source natural gas from multiple Permian Basin connections, including gas processing facilities in the Midland Basin and the Agua Blanca Pipeline in the Delaware Basin.
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“It’s an exciting opportunity and we’re pleased our joint venture with Whitewater and MPLX is already yielding growth opportunities,” Michael Barnes, spokesperson for Enbridge, told the Reporter-Telegram by email.
“Blackcomb is the fifth proposed pipeline project out of the Permian, but the first to reach FID after Matterhorn Express Pipeline,” noted Alex Gafford with East Daley Analytics. Other proposed pipelines include the Warrior from Energy Transfer, Targa’s Apex and Moss Lake’s DeLa Express, while Kinder Morgan is seeking customers for a compression expansion on its Gulf Coast Express. Gafford noted that Targa’s participation in Blackcomb likely means cancellation of the Apex proposal.
Blackcomb would follow the 2.5 Bcf/d Matterhorn Express pipeline to meet near-term production growth from the Permian, Gafford continued. But his analysis sees challenges for the project.
“While the Permian is chronically constrained, our basin model shows latent gas egress capacity as production struggles to fill Blackcomb ahead of start-up of the 2 billion cubic feet per day Saguaro Connector in 2029. Producers would need to step up drilling more than we assume, and crude pipelines would need to be expanded to raise the ceiling for oil-driven growth, in order to fill Blackcomb and later Saguaro in our Permian model,” he wrote in his analysis of the project.
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Blackcomb is expected to enter service in the second half of 2026 and will be constructed and operated by WhiteWater. The WPC Joint Venture will own 70% of the project, 17.5% by Targa and 12.5% by MPLX.
The WPC joint venture, which owns the Whistler Pipeline, is owned 50.6%b y WhiteWater, 30.4% by MPLX and 19% by Enbridge.
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Aug 10, 2024
OIL EDITOR