American Midstream, Targa form Cayenne Pipeline JV

Midstreamer American Midstream Partners (AMID) announced Tuesday it’s formed a joint venture with fellow midstreamer Targa Midstream Services to transport Y-grade (mixed) natural gas liquids within Louisiana.

Specifically, the so-called Cayenne Pipeline LLC JV will move NGLs from the Targa-operated Venice Energy Services gas processor, to Enterprise Products Partners’ pipeline at Toca, for delivery to Enterprise’s Norco fractionator.

“Formation of Cayenne is another step in executing our strategy of linking offshore gas supply to on-shore demand. The project will benefit the offshore producer community while driving a significant increase in the value of a pipeline by altering its service … ," said Lynn Bourdon III, president and CEO.

As part of the Cayenne JV, American Midstream is contributing an underutilized natural gas pipeline that will be converted for NGL service, Kallanish Energy finds.

The project is supported by a 15-year dedication of all NGL production from Targa’s 750 million cubic feet per day (MMcf/d) Venice plant, served by six offshore lines in the Gulf of Mexico.

The pipeline will have initial capacity of over 40,000 barrels per day (BPD, with the ability to throughput more than 50,000 BPD.

AMID and Targa will each have 50% economic interests and 50% voting rights, respectively, with Targa serving as the operator of the JV. The costs of conversion and associated construction will be shared equally by the partners.

The project is expected to be fully operational by year-end 2017.