Velocity Midstream Partners has secured long-term commitments from Shell Western E&P for transportation and terminal services for light oil and condensate production from Shell's position of more than 100,000 acres at the Harrison Ranch (also known as the Piloncillo Ranch) in the Eagle Ford Shale in South Texas.
Velocity has begun construction on its 12-inch diameter Gardendale Pipeline, which will traverse Webb, Dimmit and La Salle counties in Texas, terminating at its Gardendale Hub near Gardendale, TX, the Tulsa-based company said. Both the pipeline and hub are scheduled to be operational this fall.
"The Gardendale Terminal and Hub will have 100,000-plus barrels of initial storage and will provide access to downstream takeaway pipelines, truck loading and unloading facilities, as well as U.S. Development Group's rail loading facilities adjacent to Velocity's terminal," Velocity said. The pipeline will also serve as an extension of Velocity's Catarina Pipeline and Terminal facilities in Catarina, TX, which were established last year to provide transportation and terminal services to several large producers in the area.
Velocity said it is formalizing interconnection agreements at the terminal with several downstream pipelines, including Enterprise Products Partners LP (EPP) and Plains All American Pipeline LP.
"The terminal has been designed to provide segregated services for both higher and lower gravity products, allowing producers and purchasers the ability to sell and/or transport specific products or blends of products in a manner that creates the highest market value," Velocity said.
EPP recently announced an 80-mile extension of its 350,000 b/d Eagle Ford Shale crude oil pipeline, which would allow the partnership to serve production in the southwestern portion of the play (see Shale Daily, May 4). On Tuesday Plains said growing production from the Eagle Ford has prompted it to agree to build a new 130-mile crude oil and condensate pipeline from the western region of the Eagle Ford to a marine terminal facility in Corpus Christi, TX (see Shale Daily, May 18).
Velocity plans to have its Eagle Eye oil pipeline in service both west and east of the Gardendale Hub soon after the hub becomes operational. The partnership said it is finalizing terms with several actively drilling producers regarding gathering and transportation pipelines serving the Eagle Ford's lower API gravity oil window.
Other Eagle Ford Shale infrastructure projects have recently been announced by Koch Pipeline Co. LP (see Shale Daily, April 12), Genesis Energy LP, NuStar Logistics LP and TexStar Midstream Services LP (see Shale Daily, April 7), Magellan Midstream Partners LP and M3 Midstream LLC, and Watco Cos. LLC and Kinder Morgan Energy Partners LP (see Shale Daily, March 8).