|

Blue Racer Midstream Looks to Raise Another $300M from IOUs

Last November Blue Racer Midstream–the pipeline and processing plant company formed in 2012 as a joint venture between Caiman Energy II and Dominion and focused totally on the Marcellus and Utica Shale region–floated IOUs (called senior notes) due and payable in 2022 for $550 million. Must be nice to write out an IOU and get big bucks. Blue Racer is back for more. The company announced yesterday they’re floating another round of IOUs due payable in 2022 in an effort to raise another $300 million…
Continue reading

| | | | | | |

Blue Racer Brings OH Processing Plant Online, Continues to Expand

Blue Racer Midstream, a joint venture between Caiman Energy II and Dominion, shared the good news yesterday that a second 200 million cubic feet per day (MMcf/d) cryogenic processing plant at its Berne Natural Gas Processing Complex in Monroe County, OH (known as Berne II, yes, they name these things) is now online and operating. Berne II doubles the processing capacity at the plant. Blue Racer also operates a processing AND fractionation complex in Natrium, WV. A 30-mile Y-grade (NGL) pipeline connects the two facilities so that Berne can send along its NGLs to Natrium for further processing. Fractionaters like those in Natrium separate NGLs into their component hydrocarbons, including ethane, butane, propane, etc. In addition to Berne II going online, Blue Racer gave us a general update on the expanding health of their operation: They have 14 long-term major Marcellus/Utica drilling customers; 650 miles of gathering pipelines in OH and WV with another 200 miles of new gathering lines under construction; and gathered volumes have doubled, and processed volumes have tripled in just the last year…
Continue reading

| |

Blue Racer Midstream CFO Promoted over President to Become CEO

Some changes at the top of Blue Racer Midstream–the pipeline and processing plant company formed in 2012 as a joint venture between Caiman Energy II and Dominion and focused totally on the Marcellus and Utica Shale region. Jack Lafield, founder and CEO of Caiman Energy (sold to Williams for $2.5 billion) and current CEO of Caiman Energy II and Blue Racer, has stepped down as CEO of both companies. Lafield will continue to serve as chairman of the board for Caiman Energy II and remains a member of the board for Blue Racer. In his place Stephen Arata, CFO for both companies, has been named CEO for both Caiman Energy II and Blue Racer Midstream. Although the announcement that Lafield is “retiring” from his post as CEO of both Caiman and Blue Racer as of today (see below), the official biography for Arata on the Blue Racer website says the transition became effective on April 1st–not sure why there is a discrepancy. What’s equally intriguing (to MDN) is that Caiman/Blue Racer’s current president and COO, Rick Moncrief, was not promoted to the top spot and instead Arata, the CFO, was–which is not the typical succession path…
Continue reading

| | | | | |

Dominion Says Their Pipelines Gather 80% of All Ohio Natural Gas

The Guernsey County Energy Coalition heard from utility and midstream giant Dominion last week at their regular meeting in Cambridge, OH. Mack Smith Jr., Dominion’s manager of commercial gas services, had some fascinating things to say. One of them was this: “Dominion gathers about 80 percent of all Ohio gas and interconnects with seven major pipelines to distribute gas to markets, and to sell storage services to marketers and end users.” Did you know that Dominion gathers 80% of all Ohio natural gas? We sure didn’t! Here’s some more pickings from what Smith said last Thursday…
Continue reading

| | | | | |

Blue Racer Shelves Plans for Mahoning, OH Wet Gas Plant

It was only last August that Blue Racer said they would build a new $70 million wet gas processing plant in Mahoning County, OH (see Blue Racer to Build New Wet Gas Plant in Mahoning County, OH). A Blue Racer Midstream executive backpedaled last Thursday at the Marcellus-Utica Midstream conference and said those plans are now shelved, indefinitiely. Why? That part of the shale play “hasn’t panned out yet” for the company…
Continue reading

| | | | |

Marcellus-Utica Midstream Conf: $30B of NE Infrastructure Needed

more more moreDay two, and the concluding day at the Hart Energy Marcellus-Utica Midstream Conference in Pittsburgh, proved as interesting as the first day (for a day one recap, see Marcellus-Utica Midstream Conf: Marcellus is “Best of the Best”). One of the speakers on day two was Scott Williams, executive VP and chief commercial officer for Blue Racer Midstream, who spoke about his company’s processing plants in the northeast. Blue Racer’s Natrium, WV plant connects to Sunoco Logistics’ Mariner West ethane pipeline, which carts Blue Racer’s ethane to Sarnia, Ontario (Canada) and the Nova Chemicals Corunna ethane cracker. Blue Racer also operates the Berne processing plant in Monroe County, OH. According to Williams, “in excess of $30 billion worth of infrastructure still needs to be built” in the northeast. Wow! That should keep a variety of companies busy for a while. A VP from midstream giant Williams (which recently bought out Access Midstream) agrees…
Continue reading

| | | | |

Was the Blue Racer Accident in Noble County, OH Preventable?

preventionNearly two weeks ago there was a fatal accident at a Blue Racer Midstream condensate pumping skid in Noble County, OH in which an electrical contract worker was killed (see Blue Racer Midstream Explosion Kills One Worker in OH). There was precious little information about the accident–what caused it–at the time. And since then, we’ve spotted nothing. We know it takes time to investigate such things, but usually there is at least an update or two during that period. We did, however, spot a letter to the editor from a veteran oilfield petroleum engineer who claims the accident was preventable. Since this engineer doesn’t work in the northeast and has no personal knowledge of the accident, we thought it was a pretty brash statement to make. Or was it?…
Continue reading

| | | | |

Blue Racer Midstream Explosion Kills One Worker in OH

There was an explosion and fire at a Blue Racer Midstream condensate pumping skid (equipment that moves natural gas liquids through the stabilizer process) in Noble County, OH. An electrical contract worker from Virginia, Norman Butler (48 years old), sadly, was killed. The pump station is located next to a CONSOL Energy drill pad in northwest Marion Township, about 50 miles west of Wheeling, WV, between Interstates 70 and 77. A CONSOL spokesperson said none of the equipment at their site was affected and everything has been shut-in for now…
Continue reading

| | | | | |

Blue Racer Condensate Pipeline Ruptures/Burns in Monroe County, OH

A Blue Racer Midstream condensate pipeline caught fire early Tuesday morning near Cameron (eastern part of Monroe County, OH). Condensate is lighter than crude oil but heavier than natural gas liquids. Think of it as really light oil. Blue Racer’s condensate pipeline runs from Utica wells in eastern Ohio to Blue Racer’s processing plant in Natrium, WV. According to officials, the rupture in the 8-inch pipeline burned for several hours and burned several acres of surrounding woods before burning itself out. Fortunately it was a remote area where the accident occurred and no one was injured…
Continue reading

| | | | | | | | |

Blue Racer to Build New Wet Gas Plant in Mahoning County, OH

Listen up supply chain companies who want to get involved with a big new project coming in the Ohio Utica Shale. Blue Racer Midstream, the $1.5 billion joint venture between Caiman Energy II, LLC and Dominion formed in December of 2012, plans to build a new wet gas processing facility in Mahoning County by June 2016. The new facility, located near Petersburg in Springfield Township appears to be “back on track” according to an article in the Youngstown Business Journal
Continue reading

| | | | | | | | | | | | |

OGA 2: Panel Discussion – Marcellus/Utica Midstream Update

Panel I: Marcellus/Utica Midstream Update – 2014 and Beyond

  • Discussing how much infrastructure is actually needed in the Marcellus/Utica region and the current balance between supply and demand?
  • Targeting methods for managing pricing variation, overcoming takeaway chokepoints in areas with depressed prices
  • Detailing NGL takeaway issues and the cost/benefit analysis for pipeline expansion
  • Addressing the impact of ethane crackers on the Marcellus/Utica midstream
  • Assessing midstream investment in the northeast, looking ahead to the major projects for 2014
  • Offering insight to the challenge of sourcing skilled labor with understanding of the midstream sector, highlighting the impact of the midstream sector on the Northeast labor market
  • Comparing the differences/unique requirements between wet gas & dry gas gathering infrastructure

Moderator: Michael L. Krancer, Energy, Petrochemical and Natural Resources Practice Group Leader, Blank Rome LLP
Speakers: Brent Breon, Vice President Business Development, Blue Racer Midstream
Tony Blando, Vice President Marketing, NiSource Midstream Services, Columbia Pipeline Group
Aubrey Harper, Vice President Business Development, IPS Engineering / EPC
Brett Nixon, Director of Business Development, PVR Partners
Continue reading

| | | | | |

Blue Racer Berne Processing Facility Construction Set to Begin

please expediteBlue Racer Midstream is asking Monroe County, OH to approve a new, large electric transmission line that will run about 2,000 feet from a mainline to its Berne processing complex site. When the first phase of the Berne site is complete it will process 200 million cubic feet per day of natural gas. If all goes according to the new plan, construction will begin in early June and be completed in late August. Blue Racer has asked for approval of the new 138 kV transmission line, which will power some really big compressor engines, to be “expedited” by the county.

Here’s more on the Berne facility…
Continue reading

| | | | |

Blue Racer Natrium Wet Gas Processing Plant Addition Almost Ready

Last September an explosion and fire at Blue Racer Midstream’s Natrium, WV natural gas processing plant closed the plant (see Explosion/Fire at Blue Racer’s Natrium, WV Processing Plant). The plant remained closed for five long months, causing some of their customers, including Rex Energy and Atlas Resources, to find alternatives to process wet gas (see Blue Racer’s Natrium Plant to Remain Offline Until Jan 2014).

It certainly was a happy day in January when the facility came back online, with repaired and new equipment, and a new alarm system for the nearby community. Always in the cards was an expansion of the processing capacity at the Natrium facility–doubling the ability to process and separate wet gas from 200 million cubic feet per day to 400 Mmcf/d. Blue Racer, when announcing the re-opening of the original plant in January, also announced they already have four new customers lined up for the extra/new capacity (see Blue Racer: Natrium Plant Back Online, New Customers, Adds Barging). Good news for those new customers–the extra capacity is about to go online…
Continue reading

| | | | | |

Blue Racer Exec Says NE Midstream Needs Another $30B+ Investment

Blue Racer Midstream CEO Jack Lafield spoke at the Hart Energy Marcellus-Utica Midstream Conference and Exhibition in Pittsburgh yesterday, and he had some interesting things to say. As for the $10 billion in infrastructure already invested in the Marcellus/Utica, Lafield says that’s “only a fraction” of what’s needed for investment in the coming years. Lafield says at least $30 billion more needs to be spent “just to keep up with the demand” for infrastructure. Yikes! He also said in his 42 years in the industry, “this is about as good as it gets.”

Also speaking yesterday was MarkWest Vice President of Corporate Development, Scott Garner, who said that MarkWest is spending $2 billion this year on the Marcellus/Utica. As MDN found with our list of 111 midstream/infrastructure projects published in our Marcellus and Utica Shale Databook Volume 2, we estimated there’s at least $40 billion in projects planned or already in process over the next five years or so. Here’s more pickings from yesterday’s conference:
Continue reading

| | | | | | | |

Blue Racer: Natrium Plant Back Online, New Customers, Adds Barging

Big news from Blue Racer Midstream. Last September there was an explosion and a fire “isolated to a small area” at the Blue Racer Natrium processing and fractionation facility in Marshall County, WV (see Explosion/Fire at Blue Racer’s Natrium, WV Processing Plant). The fire knocked the plant offline for customers needing to process wet gas. At least two (perhaps more) customers found other sources to process their wet gas (see Blue Racer’s Natrium Plant to Remain Offline Until Jan 2014). According to a single sentence buried in a press release issued yesterday, the Blue Racer Natrium plant is finally, after five long months, back online. No date was given for when it resumed operations–presumably yesterday or over the weekend. The statement says, “The Natrium I processing unit has recently returned to service following a temporary shutdown that occurred after a fire damaged the unit.”

No mention of how long it was offline (five months!) or the work done to get it back online. Probably the lawyers telling them to keep their mouth shut. Anyway, we’re happy to see it back up and running. In addition to that very big news (which was decidedly downplayed in the press release), Blue Racer also announced yesterday they’ve picked up several new customers for an expansion at the Natrium processing/fractionation plant (see who below). Finally, Blue Racer announced that in addition to the current rail, truck and pipeline they use to move NGLs (natural gas liquids) from the plant, they’re adding barging down the Ohio River. Notwithstanding the downplayed reopening of the Natrium plant, this is one of the most enlightening press releases from a midstream company we’ve seen in some time…
Continue reading

| | | | | | | | | | | |

Utica/Marcellus Construction Spending Rockets in Wheeling Area

According to McGraw Hill Construction, the Wheeling, WV Metropolitan Statistical Area, which includes Ohio and Marshall counties in WV and Belmont County in Ohio, saw construction explode from $60.3 million in 2012 to $1.57 billion in 2013–a 29-fold increase. The vast majority of that explosion in construction came from–you guessed it–the Marcellus and Utica Shale. Midstream companies Williams and Blue Racer spent the majority of that on new processing plants and pipelines in the area.

This is incredibly good news for that area of the Ohio Valley. The even better news? Ironworkers Local No. 549 predicts this kind of spending by the drilling industry will go on for at least another 5-10 years. Wow!…
Continue reading