At Morgan Stanley’s midstream conference in early March, several MLP management teams discussed the prospects of converting underutilized gas pipelines that earn low tariff rates into oil pipelines. For example, Energy Transfer Equity LP discussed the possibility of converting the Panhandle interstate natural gas pipelines (which it will acquire via the merger with Southern Union in mid to late March) to crude oil service. Though still in a nascent stage, the natural gas to oil pipeline conversion will likely become an emerging trend as it reflects infrastructure reconfiguration to accommodate new sources of crude oil and the changing landscape of the refining markets (such as refinery closures in the Northeast).
For the full article, please email Tamar Essner at Tamar.Essner@thomsonreuters.com
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