Shippers have stepped up for long-term contracts for capacity on the proposed Texas Express Pipeline (TEP) and the natural gas liquids (NGL) pipeline project will move forward, a trio of project sponsors said Tuesday.
Future shippers have tendered 15-year ship-or-pay agreements representing volume commitments of 232,000 b/d with the option to increase volumes. Among those contracting are non-affiliates of the project's backers: Enterprise Products Partners LP, Enbridge Energy Partners LP. and Anadarko Petroleum Corp.
Originating near Skellytown in Carson County, TX, the 20-inch diameter TEP mainline would run 580 miles to Enterprise's NGL fractionation and storage complex at Mont Belvieu, TX, and would provide access to other third-party facilities in the area.
Plans for the project were announced last September (see Shale Daily, Sept. 7, 2011).
"The pipeline will provide much-needed takeaway capacity for producers in West Texas, the Rocky Mountains, southern Oklahoma and the Midcontinent area, giving them access to the largest NGL market along the Gulf Coast and the opportunity to maximize the value of their NGLs," the project backers said.
Production from the Rockies, Permian Basin and Midcontinent is to be delivered into TEP through Enterprise's existing Mid-America Pipeline System (MAPL), which runs north through Oklahoma into Conway, KS, and south into the Permian Basin.
"This joint venture with Enbridge and Anadarko brings together partners with unique and complementary strengths to provide an industry solution that addresses the need for flow assurance and market choices for producers, as well as reliable supplies of price-advantaged, natural gas-derived feedstocks to meet the increasing demand of petrochemical operators," said Michael A. Creel, CEO of Enterprise's general partner. "For Enterprise, this project is a 'bolt-on' expansion that enhances the value of our integrated midstream network of assets, including the pipelines that will feed TEP, as well as our fractionators, storage facilities and distribution network at Mont Belvieu, which will be fed by the new pipeline."
The venture also includes two new NGL gathering systems. The first would connect TEP to gas processing plants in the Anadarko/Granite Wash production area in the Texas Panhandle and Western Oklahoma. The second NGL gathering system would connect the new pipeline to Barnett Shale gas processing plants in central Texas.
Enterprise would construct and operate the pipeline, while Enbridge would construct and operate the gathering systems. Enterprise representatives are working with landowners and negotiating right-of-way agreements. The pipeline and related gathering systems are expected to begin service in the second quarter of 2013, subject to regulatory approvals.