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EnLink to Build Out Midstream Operations in Permian, South Louisiana

EnLink Midstream affiliates late Tuesday launched two growth projects and signed supporting fee-based contracts to expand onshore operations in the Permian Basin and in South Louisiana.

Devon Energy Corp. late last year provided nearly all of its midstream assets, mostly in Texas and Oklahoma, as well as 800,000 net acres, to form a partnership with Crosstex Energy Inc.; the business launched in March (see Shale DailyMarch 10Oct. 21, 2013). The partnership is traded publicly through general partner EnLink Midstream LLC and EnLink Midstream Partners LP.

"Earlier this year we outlined our growth strategy to reach our goal of doubling the company’s size by the end of 2017," said CEO Barry E. Davis. "These are exactly the types of projects we identified that will help us reach our objectives. Our strong asset base in premier oil and gas plays along with our focus on establishing long-term, fee-based contracts creates an extensive pipeline of opportunities."

In the Permian, EnLink plans to expand its natural gas gathering and processing system with a 120 MMcf/d processor to be built near existing assets and by expanding the rich gas gathering system. The project is set to be operational in the second half of 2015 at a cost of more than $200 million. Total capital investment in the Permian including the newest project would grow to $400 million-plus. Once completed, total operating processing capacity in the region would be about 240 MMcf/d.

As a part of the expansion, Devon signed a long-term, fee-based agreement for services on more than 18,000 acres under development in Martin County, TX, within the Permian's Midland subbasin. The project involves constructing several low-pressure gathering pipelines and a 23-mile, 12-inch diameter pipeline that would tie into the new Bearkat gathering system (see Shale DailyFeb. 7). The pipelines are scheduled to be operational in early 2015.

Separately, EnLink entities secured a series of agreements with Marathon Petroleum Corp. subsidiary MPL Investment LLC to create Ascension Pipeline Co. LLC in Louisiana. The joint venture plans to build a 30-mile natural gas liquids (NGL) pipeline to connect to EnLink's existing Riverside fractionation and terminal complex to Marathon's Garyville, LA, refinery on the Mississippi River.

The bolt-on project to EnLink's Cajun-Sibon NGL system is to be supported by long-term, fee-based contracts with Marathon. EnLink would serve as construction manager and operator, with startup set for 2017.

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