Kinder Morgan Energy Partners LP and Copano Energy LLC plan to expand their Eagle Ford Gathering LLC joint venture (JV). Interest in the JV has grown along with enthusiasm for the liquids-rich Eagle Ford Shale.
The partners plan to provide more than 200,000 MMBtu/d of incremental gathering and processing capacity to Eagle Ford Shale producers with additional pipeline facilities and a long-term agreement with Formosa Hydrocarbons Co. for additional processing and fractionation services.
Last summer the JV said it had secured SM Energy Co. as a customer for a 10-year term (see Daily GPI, July 7, 2010). Then last November Chesapeake Energy Marketing Inc., a unit of Chesapeake Energy Corp., signed up for service (see Shale Daily, Nov. 17, 2010).
In addition to 111 miles of pipeline currently under construction, Eagle Ford Gathering will build a 54-mile, 24-inch diameter crossover pipeline between existing Kinder Morgan pipelines, and an additional 20-mile, 20-inch diameter pipeline that will enable the JV to deliver gas to Formosa, the partners said. Kinder Morgan will construct and operate the two additional pipelines. Eagle Ford Gathering recently made an agreement with Formosa to support its processing and fractionation needs and expand operational flexibility.
Duane Kokinda, president of Kinder Morgan’s Texas Intrastate Pipelines Group, said the agreement will provide Formosa with long-term supplies of natural gas liquids (NGL) feedstock and allow for more processing and fractionation capacity for the JV as early as the fourth quarter. “The crossover pipeline will have capacity in excess of 400 million cubic feet per day, which will give the joint venture additional options to provide services to Eagle Ford Shale producers,” he said.
“This expansion of our joint venture with Kinder Morgan provides significant additional capacity for Eagle Ford Shale producers and will allow the joint venture to more fully utilize the 600 MMcf/d of capacity on its 30-inch pipeline,” said Copano Energy CEO R. Bruce Northcutt. “We expect this additional capacity to be substantially contracted for by early 2011.”
Kinder Morgan and Copano plan to spend about $100 million to construct the crossover pipeline and related facilities and expect to complete the new facilities by year-end. Eagle Ford Gathering’s previously announced $175 million, 30-inch diameter pipeline in the western portion of the Eagle Ford is under construction and remains on schedule to be completed in the third quarter, the partners said.
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