Summit Midstream Partners, LP makes FID on Double E Pipeline project
Published by Aimee Knight,
Summit Midstream Partners, LP has announced a final investment decision (FID) to proceed with the Double E Pipeline Project, having secured sufficient commitments pursuant to binding precedent agreements for long-term, firm transportation service and having executed definitive joint venture agreements with an affiliate of Double E's Foundation Shipper (the ‘JV Partner’).
Concurrent with the FID, Double E's Foundation Shipper amended its previously executed precedent agreement. Together with firm commitments from other shippers, Double E has secured 10-year take-or-pay volume commitments for a substantial majority of its initial throughput capacity of 1.35 billion ft3/d. Throughput capacity on Double E could be expanded at a later date to 1.85 billion ft3/d with the installation of compression facilities. Commercial discussions with additional potential shippers are ongoing and SMLP will look for opportunities to subscribe the limited remaining capacity prior to commissioning.
Double E will provide natural gas transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas. SMLP will own a majority of the Project, will lead the development, permitting and construction of the Project, and will operate Double E upon commissioning. SMLP estimates that its share of the capital expenditures required to develop Double E will total approximately US$350 million, and that more than 90% of those capital expenditures will be incurred in 2020 and 2021.
SMLP intends to fund its share of the capital expenditures for Double E with a combination of internally generated cash flow and proceeds from potential non-core asset divestitures. In addition, given the take-or-pay volume commitments underpinning the Project, SMLP and its lenders have amended SMLP's revolving credit facility to provide additional flexibility with respect to its financial performance metrics during the construction of the Project. SMLP will continue to evaluate opportunities to further optimise its financing plan for Double E as it continues to develop the Project.
"We are excited to announce our FID on the Double E Pipeline Project, which will provide critical energy infrastructure for rapidly growing residue natural gas volumes in the Northern Delaware Basin," said Leonard Mallett, interim President and Chief Executive Officer of SMLP.
"The Double E Project will serve an infrastructure-constrained area, alleviate natural gas flaring, and provide access to growing markets along the US Gulf Coast. Double E is a marquee project for SMLP, and when combined with our existing gathering and processing operations in the Permian Basin, promotes our strategy of achieving scale, diversifying our operations downstream of wellhead gathering, and becoming more integrated in our Core Focus Areas."
Double E expects to file its section 7(c) application with the Federal Energy Regulatory Commission in the 3Q19, and estimates a 3Q21 in-service date, assuming timely receipt of the requisite regulatory approvals.
Read the article online at: https://www.worldpipelines.com/project-news/27062019/summit-midstream-partners-lp-makes-fid-on-double-e-pipeline-project/
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