Narrative
Full Description
Project narrative
On February 21, 2020, a syndicate of nine banks — including the Bank of China (BOC) — entered into a $616.20 million USD syndicated loan agreement with Wink to Webster Pipeline LLC (W2W Pipeline) — a Delaware-incorporated special purpose vehicle and joint venture of American multinational oil and gas firm ExxonMobil Corporation (45% equity stake), Plains All American Pipeline, L.P. (16% equity stake), Delaware-incorporated pipeline and midstream asset company MPLX LP, of which American petroleum refiner Marathon Petroleum Corporation owns the general and majority limited partner interest in (15% equity stake), American downstream energy company Delek US Holdings, Inc. (15% equity stake), Delaware-incorporated independent midstream energy company Lotus Midstream, LLC (5% equity stake), and Rattler Midstream LP, Delaware-incorporated Rattler Midstream LP, which owns, operates, and develops midstream and energy infrastructure assets and controlled by American oil and gas company Diamondback Energy, Inc. (4% equity stake) — for the Wink to Webster Pipeline Project. This loan was divided into two tranches: a $603.20 million USD term loan tranche and a $13.00 million USD letter of credit tranche. This loan carried a maturity period of three years and a final maturity date of February 21, 2023. BOC contributed $70.00 million USD to the $603.2 million USD term loan tranche. In addition to BOC, the following lenders contributed the respective amounts to the loan syndicate: CoBank, ACB ($70.00 million USD), HSBC Bank ($70.00 million USD), JPMorgan Chase Bank, N.A. ($70.00 million USD), Metropolitan Life Insurance Company (MetLife) ($50.00 million USD), MUFG Bank, Ltd. ($76.60 million USD), the Bank of Nova Scotia (Scotiabank) ($50.00 million USD), Société Générale S.A. (SocGen) ($70.00 million USD), and Sumitomo Mitsui Banking Corporation (SMBC) ($76.60 million USD). MUFG and SMBC were the only contributors to the $13 million USD letter of credit tranche, each contributing $6.50 million USD. The proceeds were to be used by the borrower for the development and construction of the 642 mile-long (1,046 kilometers), 36-inch diameter Wink to Webster Pipeline beginning from the Plains Wink Terminal in Wink and Midland to multiple locations near Houston, including Webster and the Baytown Refinery in Baytown, with connections to Texas City and Beaumont in Texas, with a capacity of 1 million barrels per day of crude oil and condensate. The pipeline would link producers in the Permian Basin in West Texas to the Texas Gulf Coast. The project also included new operational storage capacity at the origin points of the pipeline to facilitate the segregation of multiple crude qualities prior to shipment and to increase pipeline takeaway capacity from the Permian Basin. The project was developed to ease the transportation bottleneck due to growth in Permian Basin and was expected to allow the Permian Basin production to grow while improving the business of Gulf Coast refineries. The project was expected to continue to make West Texas crude oil competitive, thus improving American energy security, bringing millions of tax dollars to Texas, and reducing the need for trucks on state roads. The pipeline path included 68 crossings and went near multiple sensitive watercourse crossings and major highways and rail lines. CCI Inc. provided project management, engineering, and geotechnical services. ExxonMobil Pipeline Company would operate the system on behalf of the owners once operational. Construction was expected to begin by the end of 2019 and the line brought into service by early 2021. The main segment from Midland to Webster and the connection from Webster to Baytown began commercial service during the week of October 15, 2020, though work complete the Wink-to-Midland segment and additional connectivity was still ongoing.