Enterprise Products Partners LP and Anadarko Petroleum Corp. have struck another midstream services deal to handle growing production from the Eagle Ford Shale of South Texas.
The parties signed a six-year agreement, which is in addition to a similar arrangement that the companies executed last September (see Daily GPI, Sept. 22, 2010). Under the new contract, Enterprise will provide gas processing as well as natural gas liquids (NGL) fractionation and transportation services to accommodate Anadarko's liquids-rich production from the Eagle Ford.
"The brisk pace at which we have been executing long-term deals is further indication of the positive outlook for the Eagle Ford Shale," said Enterprise COO Jim Teague. "The strong demand for our services also reflects an understanding on the part of Eagle Ford producers that our integrated system can assist them in maximizing the value of their natural gas, NGL and crude oil production."
Enterprise plans to construct a 46.5-mile, 24-inch diameter pipeline through LaSalle County, TX, to expand its rich gas gathering system. The new pipeline, along with portions of the partnership's previously announced pipeline expansions, will be utilized to handle the additional volumes under the new contract.
Current gas processing capacity at the partnership's South Texas facilities is 1.5 Bcf/d. With the completion of a new cryogenic processing plant in Lavaca County, TX, which is expected to begin service in mid-2012, Enterprise will add 600 MMcf/d of incremental capacity.
According to NGI's Shale Daily Unconventional Rig Count, the number of rigs active in the Eagle Ford has more than doubled from a year ago to 158; however, that is down 3% from a week ago when the count was 163. Enterprise said more than 500 wells have been drilled to date in the Eagle Ford with about 300 additional wells in various stages of completion. Current production from the play is estimated at 750 MMcf/d of gas and 80,000 b/d of crude oil and condensate.