Enterprise Products Partners LP has begun processing natural gas at the recently completed first phase of its Meeker processing complex in Colorado’s Piceance Basin. The plant has a capacity of 750 MMcf/d and is capable of extracting up to 35,000 b/d of natural gas liquids (NGL).
Phase II of the complex, which is now under construction and expected to be completed in the third quarter of 2008, will double processing capacity to 1.5 Bcf/d and 70,000 b/d of NGLs. The two phases are supported by long-term commitments from producers, including EnCana (see Daily GPI, Jan. 27, 2006) and ExxonMobil. Current inlet volumes are approximately 430 MMcf/d, which is expected to produce up to 24,000 b/d of NGLs. Natural gas volumes are expected to exceed 500 MMcf/d by the end of 2007, which will produce more than 27,700 b/d of NGLs.
“The Piceance Basin represents one of the most prolific and fastest growing energy producing areas in the nation, and the completion of our Meeker facility provides the region with valuable midstream infrastructure needed to accommodate those growing volumes,” said Enterprise CEO Michael A. Creel. “For Enterprise, Meeker provides us with yet another foothold from which to capitalize on additional opportunities in the Piceance Basin and generate incremental cash flow for our investors.”
The Meeker complex complements other projects recently completed as part of Enterprise’s Rocky Mountain growth initiative and reinforces the partnership’s integrated energy value chain philosophy, the company said. Specifically, the 50,000 b/d expansion of the Mid-America Pipeline enables the system to accommodate the increased volumes of NGLs that will be extracted at Meeker.
In addition, Enterprise’s Hobbs fractionator, which began service in August, offers another key hub for separating mixed NGL produced at Meeker into purity products, such as ethane, propane, isobutane, normal butane and natural gasoline. The Hobbs plant, which is expected to be at or near its design capacity of 75,000 b/d by the end of October, provides customers with additional options for accessing the most attractive markets, allowing them to realize full value for their products.
In addition to their processing agreements with Enterprise, EnCana and other producers are also supporting the Meeker initiative through fixed-fee gas gathering contracts on the partnership’s Piceance Creek Gathering System (see Daily GPI, Jan. 10). The 48-mile, 36-inch diameter pipeline has a capacity of 1.6 Bcf/d and extends from a connection with EnCana’s Great Divide Gathering System near Parachute, CO, northward through the heart of the Piceance Basin to the Meeker complex.
The Meeker complex also figures prominently in a 30-year midstream services agreement with a division of ExxonMobil Corp. (see Daily GPI, Nov. 22, 2006). As part of the agreement, Enterprise will provide gathering, compression, treating and conditioning services for gas produced as part of ExxonMobil’s Piceance Development Project, which encompasses more than 29,000 acres in Rio Blanco County, CO.
ExxonMobil plans a big-time expansion in the Piceance Basin to lift gas output on the northwestern Colorado leasehold to 1 Bcf/d — a 20-fold increase from 55 MMcf/d, said Senior Vice President Mark Albers at the Lehman Brothers CEO Energy/Power Conference in New York City in September (see Daily GPI, Sept. 10). He said the expansion would be enough to supply 8% of the current gas needs of U.S. households. However, he was cautious about when the expansion would be completed and how much it will cost.
Production in the Piceance Basin, which covers more than 6,000 square miles, currently exceeds 1.15 Bcf/d from more than 5,400 gas wells and has been growing at an annualized rate averaging about 25% over the past five years. Recent studies conducted by independent energy researchers estimate recoverable gas resources of approximately 42 Tcf.
In March Overland Pass Pipeline Co. LLC, a joint venture between Oneok Partners LP and Williams, announced plans to construct and operate a 150-mile pipeline lateral extension in the Piceance Basin to transport NGLs to Midcontinent markets. In addition, Williams said it would build a 450 MMcf/d NGL processing plant in the basin, where it has its most significant gas production, reserves and development activity (see Daily GPI, March 29).
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