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Enterprise to Construct New NGL Fractionator Near Hobbs, NM

In a strategic change that the company said will allow it to handle increasing Rocky Mountain volumes, Enterprise Products Partners LP said last week it will construct a $130 million natural gas liquids (NGL) fractionator that can handle up to 75,000 bbl/d at the interconnection of the MidAmerica Pipeline System (MAPL) and the Seminole Pipeline System near Hobbs, NM.

Earlier this year, Enterprise announced that it had begun initial permitting, engineering and design work for a western NGL expansion project, which included adding 50,000 bbl/d of transportation capacity on the Rocky Mountain segment of MAPL and building a new 60,000 bbl/d NGL fractionator at its Mont Belvieu, TX, complex (see NGI, Jan. 24).

However, "after additional analysis, Enterprise has decided to build the new fractionator at Hobbs instead of the previously announced 60,000 bbl/d fractionator because the Hobbs fractionator will provide a more strategic solution for the handling of increased Rocky Mountain volumes," the company said.

The new fractionator in Hobbs will be sourced from current and future processing plants located in the Rocky Mountain region, the Permian Basin, and in the Panhandle areas of Texas and Oklahoma on MAPL. Additionally, Enterprise will construct a high-rate purity ethane storage well near the new fractionator and reconfigure the interconnection between MAPL and Seminole. The project is expected to be in operation by mid-2007.

"Locating the new fractionation capacity at Hobbs allows Enterprise more strategic access to the growing markets for finished products in the Southwest and Midwest regions, the Rocky Mountain area, California and northern Mexico," said CEO Robert G. Phillips. "Additionally, the project will enable Enterprise to maximize the use of downstream the Mont Belvieu market and provide greater flexibility to provide pipeline services to the Conway NGL market."

When the project is completed, the Hobbs fractionator will have access to the largest NGL market in the United States at Mont Belvieu through Seminole and the nation's second largest NGL market located at Conway, KS, as well as NGL consumers in the upper Midwest through MAPL. Enterprise also will have access to a growing local market, which includes nearby refineries that consume NGLs as a blend stock to produce motor gasoline and increased propane demand in northern Mexico.

The new site, said Enterprise, enhances its value chain by adding fractionation capacity at a location that reduces the volume of mixed NGLs that it may transport to Mont Belvieu on third-party pipelines because of capacity constraints on Seminole, increases available capacity on Seminole and reduces the volumes Enterprise may offload to third-party fractionators in the Mont Belvieu area.

Enterprise plans to continue with its 15,000 bbl/d expansion of the existing NGL fractionator at Mont Belvieu. This will increase Enterprise's NGL fractionating capacity to 225,000 bbl/d at Mont Belvieu and reduce annual energy costs at the facility by approximately $5 million.

In total these projects will result in Enterprise operating 300,000 bbl/d of fractionating capacity on MAPL between Hobbs and Mont Belvieu. The 15,000 bbl/d expansion is expected to be completed in 2Q2006.

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