2018 Bracewell Permian Pipeline Representations

From the Permian to the Gulf Coast – Bracewell Leads the Way in Representing Midstream Companies, Investors, and Shippers For years, no one ever suspected that Saudi Arabia’s Ghawar oil field, which has yielded 5 million barrels of petroleum per day for decades, would ever be surpassed. As upstream companies scour the world over to unearth the “next great find” some fields have come close but never to the same level. Most recently, that assessment has shifted because of one play – the Permian Basin.

The Permian Basin, located in West Texas, has been producing oil since the 1920s and reached 2 million barrels per day in the 1970s. Over the next decade or so, production declined and did not creep back up until approximately 2010. Around that time, hydraulic fracturing came into play and production began to skyrocket. By the end of 2018, production had reached 3.8 million barrels per day, making it the second leading oil field in the world. While the introduction of new technology has reversed the trend of declining exploration and production in the Permian, getting the product to market presented a bottleneck and opportunity for Bracewell and its midstream clients. Representing the project entity, a major investor, or a major shipper, the firm was directly involved in the development of 10 of the 16 long haul Permian-to-Gulf Coast

pipelines announced in 2018. As the Permian continues to rival Ghawar in terms of total production, midstream companies will continue to expand and face a myriad of challenges. Bracewell is well positioned to lead the way representing these companies, investors, and shippers. Bracewell’s 2018 Permian Midstream Projects include: Cactus II – The Cactus II pipeline system includes a combination of capacity on existing crude oil pipelines and two new 26-inch pipelines. It is expandable to approximately 670,000 barrels per day. Bracewell is representing Plains All American in various arrangements for the pipeline. Epic Crude – EPIC Midstream Holdings, LP and its strategic partners, Altus Midstream (an affiliate of Apache Corporation) and Noble Energy Inc., are developing the EPIC Crude Oil Pipeline. The

pipeline, which is expected to be in service in the second half of 2019, will have an initial total capacity of 590,000 barrels per day, including 440,000 barrels per day from the Permian Basin and 150 million barrels per day from the Eagle Ford Shale. Bracewell represents Apache Corporation as a shipper on the pipeline and Altus Midstream as an equity investor in the pipeline. Grand Prix – In May of 2017, Targa Resources and Blackstone Energy Partners announced the development of the Grand Prix pipeline project, a 300,000 barrels per day, 635-mile natural gas liquids pipeline to transport NGLs produced in the Permian Basin and nearby plays to Mont Belvieu, Texas. In March of 2018, Targa Resources announced an expansion of the Grand Prix into Southern Oklahoma. Bracewell is representing Targa in this project, which includes transportation service agreements, open season matters, and regulatory issues such as tariffs and related matters. Gray Oak – A joint venture between Phillips 66 Partners and Andeavor is developing the Gray Oak Pipeline. This pipeline could deliver up to 700,000 barrels per day from the Permian to downstream markets. Near the terminus of the Gray Oak Pipeline, a joint venture among Phillips 66 Partners, Andeavor, and Buckeye Partners LP is developing the new South Texas Gateway Terminal at the mouth of Corpus Christi Bay. Bracewell represents Phillips 66 and its affiliates in the joint venture, construction and operating agreements, an equity option with Enbridge Inc., the transportation service agreements, open season matters, and regulatory issues. Gulf Coast Express – Gulf Coast Express Pipeline LLC is a joint venture between affiliates of Kinder Morgan, DCP Midstream and Targa Resources Corp. In May of 2018, the joint venture started construction on the Gulf Coast Express Pipeline Project. The approximately $1.75 billion project is designed to transport up to 2 billion cubic feet per day of natural gas from the Permian Basin to the Agua Dulce, Texas, area. Bracewell represented Kinder Morgan in the negotiation of the joint venture’s limited liability company agreement, construction management agreement, and operating and maintenance agreement. Bracewell’s representation also included the negotiation of long term transportation services agreements to financially support the project and general regulatory and commercial advice. Jupiter MLP – The Jupiter Pipeline will be a 650-mile, 36-inch crude oil pipeline with origination points near Crane, Texas and Gardendale/Three Rivers, Texas, and an offtake point in Brownsville, Texas. As designed, it will be the only pipeline out of the Permian Basin that will offer connectivity to all three deep water ports in Texas (Houston, Corpus Christi, and Brownsville). It will also have direct access to a fully capable Very Large Crude Carrier loading facility off the coast near Brownsville. Bracewell is representing the project with respect to transportation service agreements, open season, and other related matters, including regulatory advice. Permian Highway – Kinder Morgan Texas Pipeline LLC, a subsidiary of Kinder Morgan, Inc. and EagleClaw Midstream Ventures, LLC, a portfolio company of Blackstone Energy Partners, announced a final investment decision to proceed with the Permian Highway Pipeline Project (PHP Project) after executing definitive joint venture agreements and securing sufficient firm transportation agreements with shippers. The approximately $2 billion project is designed to

transport up to 2 billion cubic feet per day of natural gas from the Permian Basin to growing market areas along the Texas Gulf Coast. Bracewell represented Kinder Morgan in the negotiation of the joint venture’s limited liability company agreement, construction management agreement, and operating and maintenance agreement. Bracewell’s representation also included the negotiation of long term transportation services agreements to financially support the project, the negotiation of several capacity lease arrangements, and general regulatory and commercial advice. Permian-Houston-Nederland – Bracewell served as lead project regulatory and commercial counsel for Sunoco Logistics, now part of Energy Transfer Partners, L.P., in the development of the Permian Express 3 pipeline, an expansion of its existing pipeline system transporting crude oil from the Midland, Texas, area to Nederland, Texas, with intermediate origin points and destinations. The Permian Express 3 expansion project is currently in service for its initial phase of approximately 100,000 barrels per day from Midland to Nederland with additional capacity expansions planned. Bracewell secured a favorable declaratory order from FERC, represented the project in drafting and negotiating long term transportation service agreements, and provided regulatory and commercial advice in the open season and declaratory order process. Shin Oak – Bracewell represented Apache Midstream LLC in the execution of long-term agreements with Enterprise Products Partners L.P., committing its Alpine High natural gas liquids production to Enterprise for transportation on the Enterprise Shin Oak Pipeline. Bracewell concurrently represented Altus Midstream, an affiliate of Apache Corporation, on its option from Enterprise for a 33 percent equity stake in the Shin Oak Pipeline. The Shin Oak Pipeline project is currently under development and will provide transportation service from the Waha area in West Texas, to Mont Belvieu. Salt Creek – Apache Midstream LLC and ARM Energy Holdings announced that ARM Energy’s affiliate, Salt Creek Midstream, LLC will develop SCM Alpine, LLC, a 445,000 barrel per day NGL header system. The header system will be comprised of two pipeline segments that originate at both the Salt Creek and Apache processing facilities in southern Reeves County, Texas and interconnect with downstream pipelines, providing shippers with access to Mont Belvieu and Corpus Christi fractionation facilities. Bracewell represented Apache Midstream LLC in the pipeline project, providing regulatory and commercial structuring advice, as well as negotiating Apache Midstream’s option to acquire a 50 percent stake in the project.

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