(New throughout, adds details from earnings call)
By Liz Hampton
HOUSTON May 3 Tallgrass Energy Partners
on Wednesday said it had identified 42 potential acquisitions or
new projects totaling more than $6.1 billion in investment that
could fuel the midstream operator's growth.
Two of the potential projects are valued at around $1.5
billion each. One would be a greenfield or wholly new project,
while the other would require building out or redeveloping
existing assets, executives said.
Most of the projects fall in the same categories and are
focused on natural gas or oil, the executives said on a
conference call on Wednesday, noting "there's no corporate M&A"
on the list.
Midstream companies such as Tallgrass were hurt by low oil
prices during the last three years as volumes on their pipelines
fell and opportunities for growth dwindled.
But a deal by major oil producers in November 2016 to cut
production and stabilize global oil prices has given a boost to
U.S. crude prices and prompted midstream companies to explore
new infrastructure projects.
"In the next 90 to 100 days, if we don't have a couple
hundred million dollars of acquisitions or projects...we will be
very disappointed," said Tallgrass Chief Executive Officer David
On Wednesday, rival Magellan Midstream Partners said
it was evaluating a new pipeline to transport crude and
condensate from the Permian Basin to Corpus Christi, Texas.
Tallgrass Energy's 320,000 barrel per day (bpd) Pony
Express, which transports crude from Guernsey, Wyoming, to the
massive oil storage hub in Cushing, Oklahoma, averaged 262,000
bpd of throughput in the first quarter of this year, executives
The pipeline averaged just 242,000 bpd in January, due in
part to production halts from cold weather and increases in
drilled but uncompleted wells, while March volumes jumped to
277,000 bpd, the company said.
The company currently is in the process of building a more
than 100,000 bpd connection between that Pony Express line and
HollyFrontier Corp's El Dorado refinery. That project is
still on schedule for completion by the fourth quarter of 2017.
(Reporting by Liz Hampton, editing by G Crosse and David