Epic Y-Grade LP plans to build a second, 110,000 b/d greenfield natural gas liquids (NGL) fractionator at a South Texas fractionation complex to accommodate more Permian Basin and Eagle Ford Shale volumes, the company announced Thursday.
The new project slated for Robstown is in addition to a separate 110,000 b/d fractionator already under construction at the site. Operational fractionation capacity at the complex currently stands at 70,000 b/d.
Epics total fractionation capacity would stand at 180,000 b/d after the first greenfield project is completed in 1Q2020, and 290,000 b/d upon completion of the second unit in 3Q2021, the company said in a presentation Wednesday at the Wells Fargo Midstream and Utility Symposium.
“The decision to sanction the second greenfield fractionator resulted from Epic’s continued success securing fixed-fee multiyear supply contracts with several gathering and processing companies in the Permian Basin,” Epic management said Friday.
“We continue to execute on our strategic plan of bringing NGL supply for fractionation in the Corpus, Christi, TX, marketplace,” added CEO Phillip Mezey. He called the complex a “strategic alternative” to Enterprise Products Partners LP’s Mont Belvieu fractionation hub near Houston.
Mont Belvieu’s 10th and 11th fractionator units, scheduled to enter service in 4Q2019 and 2Q2020, respectively, would bring total fractionation capacity to more than 1 million b/d.
Epic Y-Grade’s eponymous, 700-mile NGL pipeline links NGL reserves in the Permian and Eagle Ford Shale with refiners, petrochemical companies and export markets on the Gulf Coast. The pipeline has the capacity, when fully powered with pumps, to flow around 600,000 b/d.
“While Epic’s roughly 220,000 b/d of greenfield capacity additions benefit from limited Corpus Christi competition, the roughly 1.1 million b/d of Gulf Coast capacity additions through year end-2020 is likely to pressure spot fractionation margins, with more capacity in queue for 2021,” analysts at Tudor, Pickering, Holt & Co. said Friday in a note to clients.
U.S. NGL exports now triple those of any other country, according to an April report by RBN Energy LLC.
Epic Y-Grade is a subsidiary of Epic Midstream LLC, which also is building capacity to move Permian oil to the Texas coast.