Copano Energy LLC plans to increase capacity to handle natural gas liquids (NGL) associated with growing gas production from the Eagle Ford Shale in South Texas, the midstream company said.

Copano has made a long-term fractionation and product sales agreement with Formosa Hydrocarbons Co. Inc. To enable delivery of mixed NGLs to Formosa Copano has formed a joint venture with a subsidiary of Energy Transfer Partners to construct, own and operate a 12-inch diameter NGL pipeline (Liberty Pipeline) in Texas. Liberty will run about 83 miles from Copano’s Houston Central Complex in Colorado County first to Formosa’s leased NGL product storage facility in Matagorda County and then to Formosa’s petrochemical facility in Calhoun County.

“The Formosa agreement and Liberty Pipeline, together with our other recently announced projects, are important steps in executing Copano’s overall Eagle Ford Shale strategy and will increase our total NGL handling capability to over 80,000 b/d,” said Copano CEO R. Bruce Northcutt. “These developments provide an additional market for NGLs extracted at our Houston Central Complex and help support Formosa’s fractionation, storage and olefins production operations.”

The agreement provides Copano with up to 37,500 b/d of firm fractionation services beginning in the first quarter of 2013 for a term of 15 years. It also provides that Formosa will purchase the resulting NGL products and make product storage available to Copano. Following completion of Liberty, which is expected by this summer, and until additional facility improvements at Formosa are complete, Copano will have access to a minimum of 5,000 b/d of existing Formosa fractionation capacity, as well as additional capacity on an as-available basis.

Liberty will have initial capacity of 75,000 b/d, which will be committed to Copano and Energy Transfer (50% each) under firm throughput agreements. Copano and Energy Transfer are expected to invest about $52 million for the pipeline and related facilities.

Earlier this month Copano and Kinder Morgan Energy Partners LP said they would expand their Eagle Ford Gathering LLC joint venture to provide more than 200,000 MMBtu/d of incremental gathering and processing capacity with additional pipeline facilities and an agreement with Formosa for additional processing and fractionation services (see Shale Daily, Jan. 10).