Shale Daily / NGI All News Access

Midstreamers and Producer Plan Texas NGL Pipeline

Enterprise Products Partners LP, Enbridge Energy Partners LP and Anadarko Petroleum Corp. are partnering on a new natural gas liquids (NGL) pipeline from Skellytown, TX in Carson County to NGL fractionation and storage facilities in Mont Belvieu, TX. The new system would benefit takeaway capacity from the Barnett Shale as well as from other plays.

The 580-mile Texas Express Pipeline (TEP) would help producers in West and Central Texas, the Rocky Mountains, southern Oklahoma and the Midcontinent maximize the value of their natural gas production by providing additional takeaway capacity and enhanced access to the Gulf Coast NGL market, the partners said. Initial capacity would be 280,000 b/d, which could be expanded to 400,000 b/d.

The venture would include two new NGL gathering systems. The first would connect TEP to gas processing plants in the Anadarko Basin/Granite Wash production area in the Texas Panhandle and western Oklahoma. The second would connect the new pipeline to Central Texas and Barnett Shale processing plants.

Volumes from the Rockies, Permian Basin and Midcontinent regions would be delivered to the TEP system on Enterprise's existing Mid-America Pipeline (MAPL) assets between the Conway hub and Enterprise's Hobbs NGL fractionation facility in Gaines County, TX. Enterprise would construct and serve as the operator of the pipeline, while Enbridge would build and operate the new gathering systems. The pipeline and gathering systems are expected to begin service in the second quarter of 2013, subject to regulatory approvals, the partners said.

"We are very pleased to partner with Enbridge and Anadarko on this project, which offers a comprehensive industry solution for addressing NGL transportation constraints that are currently limiting access to the largest domestic NGL market located along the Gulf Coast," said Enterprise CEO Michael A. Creel. "The new pipeline and gathering systems, which are underpinned by long-term contracts, will also have the capability to provide takeaway capacity for other producing areas not presently served by the MAPL system, including Oklahoma's Granite Wash, the Anadarko-Woodford Basin, and the Barnett Shale. Wider access to multiple production areas, in addition to a competitive transportation fee structure, makes this an attractive option for producers and natural gas processors. NGLs controlled by affiliates of Enterprise, Enbridge and Anadarko will solidly anchor the project."

Enterprise has been enthusiastic about the midstream opportunities that have been created by continued development of Gulf Coast region shale plays (see Shale Daily, Aug. 10).

While providing producers with takeaway capacity, TEP would also supply petrochemical facilities with feedstock. "Demand for natural gas-derived feedstocks remains strong, driven by the wide spread between crude oil and natural gas prices," the partners said.

"This project will further enhance our ability to consistently access premium Mont Belvieu markets and increase the wellhead netbacks for our growing NGL production from our Rockies and Texas assets, as well as better align our interests with the project developers through our equity participation," said Anadarko's Danny Rea, vice president for midstream.

Last month DCP Midstream said it was moving ahead with the Sand Hills Pipeline to carry NGLs from the Permian Basin and Eagle Ford Shale to markets along the Gulf Coast (see Shale Daily, Aug. 19). Crosstex Energy LP also has announced plans to construct a new NGL pipeline and expand fractionation facilities in Louisiana (see Shale Daily, July 27).

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