Shale Daily / NGI All News Access

Pioneer JV Signs With Enterprise in Eagle Ford

Units of Enterprise Products Partners LP have struck 10-year agreements to provide midstream services for liquids-rich gas and crude oil production from the Eagle Ford Shale in South Texas, the partnership said Monday.

The agreements are with Pioneer Natural Resources USA Inc., Reliance Eagleford Upstream Holding LP and Newpek LLC [collectively called the Pioneer Joint Venture (JV) (see Daily GPI, June 25)]. The agreements cover a "significant portion" of the Pioneer JV's expected production, including commitments for firm gas transportation,gas processing, natural gas liquid (NGL) fractionation and transportation services and crude oil marketing, Enterprise said.

"The flexibility of our existing integrated network, combined with new options that will be available with our assets currently under construction, has positioned Enterprise to provide a tailored solution for meeting the crude oil, natural gas and NGL infrastructure needs of producers in the Eagle Ford Shale," said Enterprise CEO Michael A. Creel.

The agreements with Pioneer and its JV partners mark the fourth major midstream deal that Enterprise has executed with Eagle Ford producers in the past year (see Daily GPI, Sept. 22; Sept. 2).

Activity in the Eagle Ford continues to increase (see Shale Daily, Oct. 13; Oct. 7). There are approximately 100 rigs working in the play. They have drilled nearly 175 wells, according to Enterprise. Current production from the play is approximately 300 MMcf/d of natural gas and 40,000 b/d of crude oil and condensate, the partnership said.

Pioneer JV production will initially be processed using Enterprise's existing Gulf Coast facilities until it can be processed at the partnership's new plant under development in South Texas (see Daily GPI, June 30). This cryogenic facility is designed for an initial capacity of 600 MMcf/d and initially will have the capability to extract as much as 60,000 b/d of NGLs. Completion is expected in early 2012.

Production will ultimately be transported on Enterprise's new 127-mile NGL pipeline that will extend from the new plant to the partnership's complex at Mont Belvieu, TX. The new pipeline will have an initial capacity of more than 60,000 b/d, which can be expanded to more than 120,000 b/d. The pipeline is also scheduled for completion in early 2012.

Enterprise has announced the construction of a fifth NGL fractionation train at its Mont Belvieu facility. The new 75,000 b/d fractionator is scheduled to be in service in early 2012. Enterprise's fourth fractionation train, which also has a capacity of 75,000 b/d, is scheduled to begin operation by the end of this year. The new units will increase fractionation capacity at Mont Belvieu to about 380,000 b/d, Enterprise said.

As part of the crude oil agreements, Enterprise will construct approximately 100 miles of supply laterals that will deliver crude oil production from the Pioneer JV into the new 140-mile pipeline that Enterprise announced earlier this year.

The Pioneer JV's producing area in the Eagle Ford covers more than 300,000 gross acres in McMullen, Atascosa, Live Oak, Bee, Karnes and DeWitt counties. The gathering lines required to link wells to Enterprise's midstream assets will be provided by EFS Midstream LLC, a JV between Pioneer and Reliance.

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