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New NGL Fractionator Planned for Mont Belvieu

Energy Transfer Partners LP (ETP) and Regency Energy Partners LP said their Lone Star NGL LLC joint venture will construct a 100,000 b/d natural gas liquids (NGL) fractionation facility at Mont Belvieu, TX.

The announcement came two days after Oneok Partners LP said it was planning construction of a 75,000 b/d NGL fractionator, MB-2, at Mont Belvieu, as part of a billion-dollar spending plan for new liquids infrastructure (see Shale Daily, May 4).

ETP said it would "utilize a substantial amount of this fractionation capacity" to handle NGLs it will deliver from its Jackson County, TX, processing plant, which is supported by multiple 10-year contracts with producers as a part of the partnership's Eagle Ford Shale projects. Additionally, Regency expects to provide NGLs to the project.

Lone Star -- which recently acquired the midstream assets of Louis Dreyfus Highbridge Energy (see Daily GPI, March 24; March 23) -- expects to have the fractionation facilities completed by the first quarter of 2013 at a cost of $350-375 million. Lone Star said it will develop additional storage facilities for y-grade liquids and other components. The project will include interconnectivity infrastructure to provide NGL suppliers and NGL markets with "significant" access to storage, other fractionators, pipelines and multiple markets along the Texas and Louisiana Gulf Coast.

"There is a growing demand for fractionation capacity, storage capacity and interconnectivity at Mont Belvieu, and this is the first major step toward becoming an even larger service provider in the Mont Belvieu area," said Greg Bowles, Lone Star senior vice president.

ETP said it has told Lone Star it is negotiating with other pipeline operators to secure capacity to provide NGL transportation from Jackson County to Mont Belvieu.

"In the event ETP determines it is more prudent to build a new pipeline rather than secure pipeline capacity through another pipeline operator, ETP has advised Lone Star that it will construct a 130-mile, 20-inch [diameter] pipeline from its Jackson County NGL processing facility to Mont Belvieu," the partnership said. The NGL pipeline from ETP's Jackson County facility would provide capacity for NGLs currently contracted by ETP and would be able to accommodate significantly more barrels from the Eagle Ford Shale or from a potential NGL pipeline from West Texas. The capacity of the 20-inch diameter pipeline would be about 340,000 b/d.

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