Meritage Midstream Services LLC plans to build a rich gas gathering system in Webb County, TX, with Escondido Resources II LLC as the anchor customer.
Escondido will also have firm capacity on Meritage's existing Eagle Ford Escondido Gathering System (see Shale Daily, Nov. 19, 2010) to move its Eagle Ford volumes, Meritage said. Escondido is expected to dedicate about 33,000 acres to Meritage, including deep and shallow rights in the Eagle Ford, Escondido and Olmos formations.
Known as the Cuervo Creek Pipeline, Meritage's rich gas gathering system will cover more than 1,300 square miles from Encinal south to Laredo. The 60-mile system will include multiple downstream interconnects. The 16-inch diameter pipeline will have an initial capacity of 150 MMcf/d and is expected to be in service in the fourth quarter. Meritage said it expects to increase its rich gas gathering capacity in 2012 to accommodate the quickly developing shallow gas play.
"The developing Escondido and Olmos story in northern and central Webb County is a real game-changer for the area, and this dedication by Escondido Resources has allowed us to significantly accelerate our rich gas gathering and processing projects for our entire customer base," said Meritage CEO Steven Huckaby.
Earlier this year Escondido said it was focusing more intently on the Escondido and Olmos reservoirs (see Shale Daily, March 3).