A new WhiteWater Midstream-led joint venture (JV) pipeline will give its owners some financial flexibility in Gulf Coast gas markets, analysts said.
WhiteWater announced April 3 that the Traverse Pipeline reached a final investment decision. The bi-directional pipeline with capacity of 1.75 Bcf/d will move natural gas 160 miles between the Aqua Dulce Hub in South Texas to the Katy area near Houston.
Traverse will have multiple connections to other WhiteWater pipelines. From the Permian, the line will connect to the Whistler, Blackcomb (in development) and Matterhorn Express pipelines, among others, according to WhiteWater.
The pipeline will enable its owners to move natural gas to markets with the most demand and can therefore bring the best price, according to an analysis by RBN.
Beyond the market advantage, optionality also allows midstream companies to make detours around pipeline maintenance. The price of gas at the Permian-based Waha Hub has gone below zero several times in the spring, the usual season for pipeline maintenance projects.
Traverse “would give the JV’s overall system a strategically valuable degree of flexibility/optionality along the most important stretch of gas pipelines and gas users in the U.S.,” RBN wrote in January, when the line’s potential development had been made public.
The line will be part of the Blackcomb Pipeline joint venture, which is owned 70% by the WPC JV, 17.5% by Targa Resources and 12.5% by MPLX.
The WPC JV is led by WhiteWater, with 50.6% ownership, and includes MPLX, with a 30.4% stake, and Enbridge, which has a 19% stake. WhiteWater’s WPC stake is, in turn, owned by I Squared Capital.
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