Enterprise Products Partners LP has added Marathon Oil Co. to the list of producers wanting long-term midstream services in the natural gas-rich Piceance Basin of northern Colorado.
Under terms of a contract announced Thursday, affiliate Enterprise Gas Processing LLC plans to construct 50 miles of new gathering lines to connect Marathon's multi-well drilling sites -- production from which is expected to peak at about 180 MMcf/d -- to the partnership's 48-mile, 36-inch diameter Piceance Creek Gathering System (PCGS).
From there the gas will be delivered to Enterprise's Meeker processing complex, the first phase of which was placed into service in October (see NGI, Oct. 22). Financial details were not disclosed.
"For Enterprise, this initiative is especially significant because it involves construction of the partnership's first wellhead gathering system in the Piceance Basin, which will leverage our integrated value chain of assets in the Rockies and generate incremental income for investors," said Enterprise CEO Michael A. Creel.
Phase I of the Meeker processing complex is designed to process up to 750 MMcf/d, and it has the capability to extract as much as 35,000 b/d of natural gas liquids (NGL). Phase II of the Meeker complex, which will double capacity of the facility to 1.5 Bcf/d and 70,000 b/d of NGL, is expected to begin operations next summer.
Creel said the Marathon agreement is part of Enterprise's ongoing program that has resulted in the execution of several long-term contracts with major producers in the region over the past year. Enterprise has entered into agreements with more than half of the 12 largest producers in the Piceance Basin, including Chevron Corp. in November (see NGI, Nov. 19).
The midstream deals for the Meeker complex so far represent the potential for more than 2 Bcf/d of gas supply, according to Creel. Enterprise expects to sign additional agreements with others in the near future, he said.
In addition to gathering pipelines, Enterprise also will construct a new compressor station to deliver natural gas into the PCGS. The station, located about 25 miles south of the Meeker complex in Rio Blanco County, CO, is expected to provide 22,000 hp of compression, as well as condensate handling and natural gas dehydration facilities.
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