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Anadarko Backing Eagle Ford Pipeline Extension

Net Midstream's Eagle Ford Midstream LP plans to construct a 105-mile, 24- and 30-inch diameter extension of its existing pipeline, supported by a long-term gas transportation agreement with Anadarko Petroleum Corp.

The extension will transport residue gas from Western Gas Partners LP's Brasada gas processing plant in LaSalle County, TX, to interstate and intrastate pipelines at the Agua Dulce Hub in Nueces County, TX. The first phase of the expansion is to enter service in December with completion expected by April 2013.

"In addition to the recently announced expansions of our liquids-handling capacity, this agreement will secure firm pipeline capacity for our residue gas, which is essential in facilitating the continued rapid production growth Anadarko is achieving in the Eagle Ford Shale," said Danny Rea, Anadarko vice president of midstream.

Anadarko has doubled the number of identified drill sites in the Eagle Ford Shale in South Texas to about 4,000 and increased its estimated net resources in the field to more than 600 million boe. The company plans to run 10 operated rigs in the Eagle Ford and expand its midstream infrastructure this year to align with anticipated production growth (see Shale Daily, March 14).

The Eagle Ford Midstream system currently consists of 55 miles of 16-inch diameter pipeline anchored by long-term commitments from producers in LaSalle and McMullen counties and delivers pipeline-quality gas to NET's LaSalle Pipeline and Transco Pipeline located near Tilden, TX, in McMullen County. NET developed, constructed and operates LaSalle Pipeline, a 53-mile, 16-inch diameter intrastate gas pipeline completed in 2009. LaSalle Pipeline provides the full gas supply requirements for a 200 MW power generation facility in Pearsall, TX.

"The second phase of Eagle Ford Midstream provides producers and processors with crucial market liquidity for their plant residue and dry gas production," said Joe Gutierrez, Net copresident. "Upon completion of this project, Net Midstream will have invested approximately $250 Million in over 200 miles of pipeline and facilities in the Eagle Ford Shale."

Net Midstream is a unit of Net Holdings Management LLC, a privately held natural gas midstream and marketing company that owns six intrastate gas pipelines in Texas and markets gas across the United States. It is owned 50% by its founders and 50% by an affiliate of ArcLight Capital Partners LLC.

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