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Enterprise Expanding, Shifting With Flow Patterns

Driven by natural gas liquids (NGL) production out of the Rockies and the Eagle Ford Shale of South Texas, Enterprise Products Partners LP plans to construct two more NGL fractionators at its Mont Belvieu, TX, facility. These would provide 150,000 b/d of incremental capacity.

"With the continuing expansion of our Eagle Ford system and the recently announced Texas Express Pipeline project providing enhanced reliability and optionality [see NGI, Oct. 10, 2011], Mont Belvieu represents the centerpiece of our integrated NGL network and is the premier North American delivery point for liquids production from the nation's most prolific shale regions," said Jim Teague, COO of Enterprise's general partner. "When service on the new fractionators begins, Enterprise will have more than doubled its fractionation capacity at Mont Belvieu in less than three years.

Projected to begin service in the fourth quarter of 2013, the two 75,000 b/d units, together, along with a sixth unit currently under construction and on schedule to commence service in the fourth quarter, would give Enterprise the capacity to fractionate more than 610,000 b/d at Mont Belvieu. The process of obtaining the necessary permits for fractionators seven and eight is under way.

Enterprise began operation of its fifth Mont Belvieu fractionator last fall (see NGI, Oct. 24, 2011).

"...[T]he additional fractionation capacity will help meet the Gulf Coast petrochemical industry's appetite for ethane, which is at an all-time high, and is projected to increase as new construction projects, conversions and expansions are completed," Teague said.

During a presentation at Enterprise's annual analyst day last week, Teague remembered that about a dozen years ago the company was proud to have about 1,000 miles of pipeline on the Gulf Coast. Today Enterprise has about 50,000 miles of pipeline. However, just because the pipe is in the ground doesn't mean the partnership can't accommodate the shifts in market trends and supply basins, he said.

"Back in those days, if you remember, Louisiana was going to be awash in NGLs, and the flow patterns were really west to east and east to west," Teague recalled. "What we're seeing is new flow patterns, more north to south -- with the exception of the Gulf of Mexico and the Eagle Ford -- more north to south, especially northeast to southeast. What we're prepared to do with that pipeline system is we'll change services; we'll change directions and we'll split flow. I think we've proved with the Atex ethane pipeline [Appalachia to Texas (Atex Express)] and the Seaway [oil] Pipeline we're fully prepared to do that."

Tudor, Pickering, Holt & Co. analyst Brad Olsen said in a note following the company's analyst day that Enterprise's "Gulf-centric asset base remains a valuable asset because the Gulf Coast will be the epicenter of future hydrocarbon and derivative exports out of North America. He cited Atex and Seaway as the company's "two most meaningful projects that are currently under way."

In the Eagle Ford, Enterprise is nearing completion of several projects and announcing new expansion for delivering the NGLs that will underpin the increased fractionation capacity at Mont Belvieu.

The partnership has entered into a long-term commitment with Anadarko Energy Services to support construction of a 173-mile extension of Enterprise's recently completed Eagle Ford NGL pipeline that links Enterprise's Yoakum gas processing facility in Lavaca County, TX, to Mont Belvieu. The extension will originate near Yoakum and extend to Western Gas Partners LP's processing facility in LaSalle County, TX. Through a connection with Enterprise's existing NGL pipeline network near Falls City, TX, the partnership's seven other integrated South Texas processing facilities will have access to markets served by Mont Belvieu. Consisting of 16-inch diameter pipeline, the extension will have a capacity of 140,000 b/d and is expected to begin service during the second quarter of 2013.

"Producer customers aren't just asking midstream companies to extract NGLs and deliver dry gas to the nearest hub (that's so 2007!)," wrote Olsen. "They are asking [Enterprise] to connect them with end markets via new NGL pipes and fractionators (that's very 2012)."

Enterprise also is is constructing its Eagle Ford rich natural gas mainline system and associated laterals. To date, Enterprise has completed construction of approximately 375 miles of gas pipeline, ranging from 16 inches to 36 inches in diameter for its Eagle Ford rich gas mainline system. When the remaining 66-mile segment is completed, Enterprise's Eagle Ford Mainline will be able to deliver 900 MMcf/d of rich gas to the Yoakum processing facility.

The first 300 MMcf/d train of the Yoakum facility is expected to begin operation in May. The second train is scheduled to begin service in July, followed by the third train in the first quarter of 2013. The Yoakum plant will then have the capability of processing up to 900 MMcf/d and producing up to an estimated 111,000 b/d of NGLs.

Construction of the NGL pipeline that links Yoakum to Mont Belvieu has also been completed.

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