The buildout of infrastructure to serve growing liquids-rich natural gas production from shale plays is continuing. 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. Pipeline construction also is under way.
"With the continuing expansion of our Eagle Ford system and the recently announced Texas Express Pipeline project providing enhanced reliability and optionality [see Shale Daily, March 7], 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.
"In addition to helping ensure the highest netback revenue to the wellhead for producers, the 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 on Tuesday, 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."
The Eagle Ford Shale has become arguably the hottest North American shale play due to the liquids-rich nature of its reserves. With natural gas prices reaching 10-year lows, producers have been moving resources out of dry gas plays to target NGLs and oil. The top 10 acreage holders in the Eagle Ford include many of the largest exploration and production companies. EOG Resources is the largest acreage holder in the play, followed by Chesapeake Energy, BP, BHP Billiton, Marathon Oil, Shell, Murphy Oil, ConocoPhillips, CNOOC and Anadarko Petroleum.
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.
As previously announced, Enterprise 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.