Here We Go! The Market, Energy, And Political Page, Part 3, T+62 -- May 1, 2018

Updates

Later, 12:52 p.m. CDT: see first comment, ".... without historical parallel."

Original Post

Well, that didn't take long. All that hand-wringing about the problems and travails of the Permian. Here we go. From Mike Fitzsimmons over at SeekingAlpha:

• the Gray Oak Pipeline; Philliops 66 Partners
• pipeline could transport up to 1 million bpd from the Permian to the Gulf Coast
• meantime, WTI in Midland was recently trading about $9/bbl below Gulf Coast crude
• first open season was heavily subscribed and there will now be a second binding open season
• the pipeline will terminate at multiple Gulf Coast markets, including a marine terminal connection in Corpus Christi for the export market

Last week Phillips 66 Partners (PSXP) announced the open season for its proposed Gray Oak pipeline had received enough volume commitments to proceed with a second open season. The ultimate capacity of the pipeline is dependent on the outcome of the second open season. If fully subscribed, the pipeline's capacity could ultimately be expanded to 1 million bpd.

And it just gets better, for those connecting the dogs:

The Gray Oak Pipeline is a joint venture: 75% owned by Phillips 66 Partners and 25% by Andeavor (ANDV) which is likely to merge with Marathon Petroleum (MPC).

Enbridge has an option to acquire up to a 32.75% interest in the joint venture. If all options are exercised, which is likely considering ENB's very important Line 3 challenges in Minnesota, Phillips 66 Partners’ ownership would be 42.25% and Andeavor’s ownership would remain 25%.

It is no coincidence Marathon's offer for Andeavor came after the announcement of Gray Oak's second open season and the same day announcement by Buckeye Partners to develop a new deep water marine terminal at the mouth of Corpus Christi Bay.

The terminal will be operated by Buckeye and will initially have 3.4 million barrels of storage. Most importantly, the terminal will have two deepwater ports capable of servicing very large crude carriers, or VLCC's, for the global export market. BPL owns 50% of the terminal and be the operator. Phillips 66 Partners and Andeavor will each own a 25% stake.

So, while the US Pacific Northwest bans rail movements; the Californians ban fracking; and the New Englanders ban pipelines, Texas just keeps rolling along. 

Wow.

But the big story line: the gap between the US and the rest of the world when it comes to energy continues to widen -- at lightning speed.

Exhibit A: