Pipeline & Midstream
Jackson Walker represents clients in every stage of the chain of gathering, treating, processing, storing, and transporting oil, gas, and hydrocarbon products, including producers, marketers, and other shippers of hydrocarbons; gas processors; storage facility owners and operators; owners of crude oil and gas gathering systems; and owners of crude oil, product, and interstate and intrastate gas pipelines.
Our multi-disciplinary approach has enabled us to assist our clients in all phases of project finance and construction, as well as the acquisition and disposition (pursuant to both asset- and equity-based transactions) of processing plants, gathering systems, and crude oil, product, and gas pipelines, including issues concerning tax, environmental, intellectual property, employment, bankruptcy, and regulatory matters.
Our attorneys also handle complex international and cross-border pipeline and other midstream development and finance projects. These projects have required our attorneys to work in some of the most difficult emerging markets and developing economies in the world, including countries through Central and South America, the Caribbean Basin, North Africa, Sub-Saharan Africa, the Middle East, South Asia, Southeast Asia, and China.
Jackson Walker regularly assists our midstream clients in all aspects of a very broad range of transactions relating to the ownership, use, and operation of U.S. and non-U.S. pipeline and other midstream assets, including the following:
- Acquisition and disposition of U.S. and non-U.S. pipelines, processing and other plant facilities, and other midstream assets and infrastructure
- Financing of U.S. and non-U.S. pipeline, processing and other plant facilities, and other midstream asset acquisitions, operations, and activities
- Federal and state taxation of pipeline and other midstream facilities, activities, and services
- Private, state, and federal easements, rights-of-way, servitudes, surface leases and licenses, and surface use agreements
- Engineering, procurement, construction, and installation of pipelines, processing plants, dehydration, treatment, and similar facilities, and other midstream assets and infrastructure
- Pipeline interconnection agreements
- Dehydration agreements
- Condensate separation, stabilization, and handling agreements
- Gas processing agreements and processing plant operating agreements
- Master service agreements and other agreements between midstream facility operators and service companies
- Crude oil, natural gas, and natural gas liquid sale, purchase, exchange, and other marketing agreements, including derivative contracts and other price risk management structures
- Oil and gas gathering agreements
- Oil and gas storage agreements
- Gas transportation agreements involving pipelines that provide intrastate and NGPA Section 311 transportation service
- Gas transportation agreements involving pipelines that provide FERC-jurisdictional transportation service subject to the Natural Gas Act
- Oil transportation agreements by pipeline, truck, rail, barge, or tanker
- Pipeline operating agreements
- Operational balancing agreements
- Capacity release transactions
- Regulatory matters pertaining to pipeline and other midstream services and activities before the Railroad Commission of Texas, the Louisiana Department of Conservation, the Bureau of Ocean Energy Management, Regulation, and Enforcement of the United States Department of the Interior, and the Federal Energy Regulatory Commission
Oil and Gas Gathering
- Representation of an affiliate of one of the largest producers of natural gas and natural gas liquids (NGLs) in the United States in structuring and negotiating a joint development project to fund, construct, operate and maintain the largest integrated midstream service complex for the gathering and processing of natural gas and the fractionation of NGLs produced in the Utica Shale play in Eastern Ohio. The project included the development, construction and operation of gas gathering, compression, and processing facilities and NGL fractionation, loading, and terminal facilities, including a state-of-the art cryogenic processing facility with initial capacity of 600 million cubic feet of gas per day, an NGL hub complex with initial NGL storage capacity of 870,000 barrels and fractionation capacity of 90,000 barrels per day, along with substantial rail loading facilities.
- Representation of an affiliate of one of the largest producers of natural gas in the United States in structuring and negotiating with a Fortune 100 energy company and an affiliate of a large independent oil and gas producer the construction, funding, and operation of a gas gathering pipeline system and related facilities to be built in the Utica Shale area of Ohio, including structuring and negotiating the limited liability company agreement, contribution agreement, construction and operation agreement, gas gathering and processing agreement, and other related venture agreements.
- Representation of a public master limited partnership in the structuring, negotiation and closing of the purchase of natural gas gathering facilities and related facilities and equipment in the Eagle Ford Shale Area of South Texas for a purchase price of $25 million, together with a gas gathering agreement and condensate gathering agreement by which the seller dedicated all natural gas production from certain of its Eagle Ford shale assets and the buyer agreed to gather and process all natural gas production from such assets through gathering facilities and related equipment that the buyer owns or that will be constructed and completed pursuant to mutually agreed upon development plans, having a value of $216 million.
- Representation of a publicly traded oil and gas producer in a transaction monetizing certain oil export and gas gathering pipelines serving an offshore production platform in deepwater areas of the Gulf of Mexico. The transaction included a sale of the pipeline assets to a special purpose entity formed by a private equity fund in a transaction valued at approximately $75 million; gas gathering and oil export agreements between the SPE and the client producer, which contemplated the producer’s payment of a monthly capacity reservation charge and usage charges per unit of production actually exported or gathered; and a pipeline operating agreement pursuant to which the client producer continued to operate the pipeline assets on behalf of the SPE.
- Representation of a major intrastate pipeline company in a transaction to monetize and provide for the further development of gas gathering systems owned by an independent oil and gas producer in East Texas. The transaction included the sale of the producer’s existing gas gathering assets to a special purpose entity jointly owned by the producer and the client, valued at approximately $36 million; a gas gathering agreement between the SPE, as gatherer, and the producer and its marketing affiliate as shippers; joint use agreements permitting the SPE to use certain surface parcels and easements retained by the producer; and a pipeline operating agreement pursuant to which an affiliate of the producer will operate the gathering systems on behalf of the SPE.
- Representation of a domestic oil and gas producer with foreign ownership in a transaction to monetize and provide for the further development of gas gathering systems owned by the client in the Haynesville Shale Field area of Louisiana. The transaction included the formation of a special purpose entity jointly owned by the client producer and a publicly traded pipeline and midstream services company; the transfer by the client producer and the pipeline and midstream services company of existing pipeline assets, easements, servitudes, and other facilities to the SPE; and a gas gathering, compression, and processing agreement between the SPE, as gatherer, and the client producer as shipper.
- Representation of a gas gathering company formed as a joint venture between a large, independent oil and gas producer and a major intrastate pipeline company in the negotiation of a firm gas gathering agreement with a publicly-traded independent gas producer covering substantial dedicated acreage in the Haynesville Shale Field in Louisiana.
- Representation of a gas gathering company formed as a joint venture between a large, independent oil and gas producer and a major intrastate pipeline company in the development of the templates for the company’s firm and interruptible gas gathering agreements.
- Representation of a publicly traded oil and gas producer in connection with the negotiation of all documents relating to the gathering, processing, and transportation of gas produced through the client’s floating production platform in the deepwater areas of the Gulf of Mexico. Such agreements included a gas sales contract, a gas gathering agreement, a gas processing and fractionation agreement, a jurisdictional gas transportation agreement, a reserve dedication agreement, a retrograde condensate transportation agreement, and a condensate handling, separation, and treating agreement.
- Representation of a wholly-owned subsidiary of a Fortune 100 integrated oil and gas company in connection with the joint construction with another Fortune 500 company of a non-jurisdictional gas gathering system on the Outer Continental Shelf, including the negotiation of the limited liability company regulations for the jointly-owned LLC created to own the gas gathering system, the pipeline construction agreement, the pipeline operating agreement, and various platform interconnection agreements.
Gas Processing and Treatment
- Representation of a publicly traded oil and gas producer in connection with the negotiation with the midstream services affiliate of a FERC – jurisdictional pipeline of a gas processing and fractionation agreement and a condensate handling, separation, stabilization, and treating agreement relating to gas produced through the client’s floating production platform in the deepwater areas of the Gulf of Mexico.
- Representation of a midstream services company in the negotiation with an independent oil and gas producer of a gas processing and gathering agreement relating to gas produced from Roberts County, Texas.
- Representation of an independent oil and gas producer in the negotiation with an intrastate pipeline and midstream services company doing business in the State of Louisiana of a firm gas gathering, pipeline construction, and processing agreement relating to gas produced from Caddo Parish, Louisiana.
- Representation of a midstream services company in the development of its standard form condensate handling, separation, stabilization, and treatment agreement.
- Representation of two subsidiaries of a major diversified energy company in the review and restructuring of the company’s natural gas liquid, methanol, and MTBE sales, purchase, and exchange agreements to conform with the accounting and legal requirements of the parent company’s price hedging activities.
- Formation of a joint venture between a developer of ethanol production plants and a subsidiary of a Fortune 100 conglomerate to serve as the vehicle for the worldwide development of plants for the production of ethanol and several related product.
- Representation of a new joint venture, formed to construct, operate, and maintain a four-million barrel capacity petroleum products tank terminal facility in Louisiana (including storage tanks and docking facilities), in structuring and negotiating the contribution of cash and assets to the joint venture.
- Representation of an affiliate of one of the largest oil and gas producers in the United States in the structuring and negotiation of a joint venture with two other large energy companies for the construction and operation of an intrastate crude oil transportation pipeline and tank farm in Oklahoma. Our representation included the structuring and negotiation of the limited liability company agreement, contribution agreement, construction agreement, pipeline operation and maintenance agreement, connection agreement, tank farm operation agreement, easement agreement, through-put and deficiency agreement, through-put agreement, and guaranties.
- Representation of a landowner in the Eagle Ford Shale area of South Texas in structuring and negotiating a joint venture entity with a pipeline transportation service provider for the funding, development, construction, operation and maintenance of a Greenfield crude oil pipeline facility to gather and redeliver oil and condensate produced from multiple oil and gas wells located on the landowner’s and adjacent landowners’ properties in two counties in South Texas.
- Representation of several crude oil pipelines in the negotiation of contracts for the construction of onshore and offshore facilities for crude oil and petroleum products.
- In connection with the representation of a large gas and power marketing company in the sale to a large producer of “heavy oil” in California of all of the gas supplies required by the producer to generate the steam and electric power used by the producer in its heavy oil operations, the negotiation of agreements permitting the marketing company to utilize, by “capacity release,” agency designation, and other management arrangements, the producer’s jurisdictional and non-jurisdictional gas transportation assets, including provisions defining permissible imbalance trading, complex procedures for the periodic cashout of imbalances, and the performance of and other services designed to optimize the value of such assets by means of a “shared profits pool.”
- Representation of a large intrastate pipeline company in gas purchase and transportation transactions related to a major gas discovery in Texas state waters, including the negotiation of dehydration and condensate removal and handling agreements, intrastate and Hinshaw gas transportation agreements, gas processing agreements, gas purchase agreements, and intrastate and NGPA Section 311 gas transportation agreements covering the residue gas after processing. Following the Chapter 11 bankruptcy filing of the gas producer, Jackson Walker represented the intrastate pipeline company in the restructuring of these transactions in bankruptcy.
- Representation of intrastate pipeline company in the negotiation and documentation of pipeline construction and operating agreements as part of the development of oil and gas reserves, including the documentation for supporting operating systems such as compressors and processing equipment.
- Representation of counsel for the gas supplier and the intrastate gas pipeline providing gas transportation service to the Tenaska Frontier Partners, Ltd., 830 MW Natural Gas-Fired, Combined Cycle Power Plant in Grimes County, Texas, including the negotiation of the gas supply agreements, intrastate and NGPA Section 311 gas transportation agreements, and pipeline construction and interconnect agreements, and the issuance of legal opinions on organizational, contractual, and statutory and regulatory compliance issues.
- Representation of the gas supplier and the intrastate gas pipeline providing gas transportation service to the Ingleside Cogeneration Limited Partnership 440 MW Natural Gas-Fired, Combined Cycle Cogeneration Facility at Occidental Chemical Corporation’s chemical plant in San Patricio County, Texas, including the negotiation of the gas supply agreement, pipeline construction and interconnect agreements, intrastate and NGPA Section 311 gas transportation agreements, and related performance guaranties, and the issuance of legal opinions regarding organizational, contractual, and statutory and regulatory issues.
- Representation of a large gas and power marketing company in the sale to a local distribution company in Appalachia of all of its consumer and industrial gas supply requirements, including the management of the local distribution company’s jurisdictional gas transportation and storage assets.
- Representation of a large gas and power marketing company in the sale of all or a portion of the gas supply requirements of electric power generation facilities in Texas having aggregate generating capacity in excess of 4000 MW, including the provision of related non-jurisdictional gas transportation on the pipeline system of the marketing company’s affiliate and the construction of associated pipeline laterals, interconnects, and metering facilities.
- Representation of a major gas marketing company in the negotiation of agreements relating to the management of jurisdictional gas transportation assets serving power plants in New England and California owned by an affiliated electric power generation company.
- Representing a new entrant to the natural gas storage industry through all aspects and phases of development of a new salt dome natural gas storage facility proposed to be constructed in Texas. Representation began at project inception and includes all aspects of project structure, development, permitting, and other regulatory and legal matters. Representing the company in all required environmental reports, studies, surveys, and assessments while simultaneously advising the company regarding required permits and approvals, including wetlands, air, water permits and operational approvals under the auspices of the Army Corps of Engineers, the US Department of Fish & Wildlife, the Texas Commission on Environmental Quality, and the Texas Railroad Commission. Successfully obtained required environmental permits, including resolving material air permitting and conformity issues associated with the project’s proposed location in a nonattainment zone and, ultimately, with facility construction, operation, transportation, and storage agreements and contracts.
- Representation of a new natural gas storage company in all aspects of developing three new depleted reservoir storage caverns in north Louisiana. Representation included helping to structure the regulatory and commercial plans for the project, assisting in the negotiation and drafting of the documents by which the land rights were obtained, filing and pursuing the necessary permit applications with, inter alia, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the FERC, and the Corps of Engineers, drafting the precedent agreements, drafting and helping to negotiate the firm and interruptible storage contracts, drafting the Statement of Operating Conditions filed with the FERC, and filing and prosecuting the application for market-based rate approval from the FERC.
- As part of the sale to a privately-owned intrastate pipeline company by a Fortune 100 company of a wholly-owned subsidiary owning several non-jurisdictional storage facilities, a major intrastate pipeline system, and a smaller Hinshaw pipeline system in Texas, the representation of the gas trading and marketing affiliate of the seller in certain related gas storage and transportation transactions with the intrastate pipeline purchaser, including the negotiation of a lease by the seller’s trading and marketing affiliate of storage capacity in the affected gas storage facilities and gas purchase/sale and intrastate and NGPA Section 311 or Hinshaw gas transportation agreements (including complex imbalance resolution procedures) to facilitate the injection and withdrawal of gas by the trading and marketing affiliate into and out of the storage facilities.
- Representation of a storage company in project development of a depleted reservoir facility in Mississippi. Work included giving regulatory advice on FERC permitting requirements, drafting precedent agreements and firm and interruptible storage agreements, and working on the sale of the project to another developer.