Shale Daily / NGI All News Access

More Projects Join Eagle Ford Oil Bandwagon

Two more infrastructure projects to target growing crude oil production from the Eagle Ford Shale of South Texas have been announced.

Koch Pipeline Co. LP plans to build a crude oil pipeline from Pettus, TX, to Corpus Christi, TX. And separately Genesis Energy LP has begun work to expand its crude oil pipeline and terminaling capabilities in the upper Texas coast.

Koch Pipeline's plans include a 20-inch diameter line, which is currently in the permitting and right-of-way acquisition phase and should be complete in mid-2012, the company said Monday.

"With this large-diameter line in operation, Koch Pipeline will have increased its system capability from Karnes County to the Corpus Christi area to about 250,000 b/d," said Koch Pipeline President Kim Penner.

The completion of the line is timed with affiliate Flint Hills Resources' updates to an Ingleside terminal that will have the capacity to ship up to 200,000 b/d of production via barge to other Gulf Coast markets.

Koch Pipeline is constructing a station near Helena in Karnes County along with connections to tank batteries in Karnes and DeWitt counties as well as a 16-inch diameter pipeline from Helena to Pettus, which will connect to the new line at Pettus.

"With several new lines, our legacy system and arrangements with Arrowhead Pipeline and NuStar Logistics, we are addressing producers' needs to move crude oil and condensate to market," Penner said. "We continue to evaluate major South Texas pipeline projects, including a project to connect producers in western counties."

Separately, Genesis has acquired three above-ground storage tanks in Texas City, TX, with capacity of 230,000 bbl that it plans to convert to crude oil capability. It has also acquired an existing barge dock at the same location, all 1.5 miles from its existing Texas pipeline system. Genesis said it also intends to construct a truck station, tankage and possible pipeline interconnects at West Columbia, TX, to be able to provide incremental transportation service for Eagle Ford and other Texas production through its system to refining markets in the greater Houston-Texas City area as well as markets accessible via barge from the new Texas City terminal.

"With our existing access to local refineries and the added ability to access, via barge transportation, other refining markets, we believe Genesis can provide quality, value-enhancing services for Eagle Ford and conventional oil produced in, and transported to, the upper Texas coast," said Genesis CEO Grant Sims.

The Genesis projects are expected to be completed in the fourth quarter, allowing the company to handle 40,000 b/d of crude oil through the Texas City terminal.

The Genesis and Koch Pipeline projects join plans recently announced by NuStar Logistics LP and TexStar Midstream Services LP to develop a pipeline to carry Eagle Ford Shale crude oil and condensate to Corpus Christi (see Shale Daily, April 7).

Additionally last month Magellan Midstream Partners LP and M3 Midstream LLC said they are developing a pipeline from LaSalle and Live Oak counties, TX, to Corpus Christi to carry crude oil and condensate from the Eagle Ford Shale to a distribution terminal in Corpus Christi; and Watco Cos. LLC and Kinder Morgan Energy Partners LP said they plan to construct and operate several rail transload facilities to handle crude oil and energy-related products in the region (see Shale Daily, March 8).

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