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TRANSPORTATION — Quick Takes
Chesapeake signs as anchor shipper on EPP line
Chesapeake Energy Corp. has signed a long-term contract as anchor shipper on Enterprise Products Partners LP's proposed long-haul ethane pipeline from the Marcellus and Utica shale regions in Pennsylvania, West Virginia, and Ohio to the US Gulf Coast. The roughly 1,230-mile pipeline would have an initial capacity of 125,000 b/d and could be quickly expanded through a combination of additional pumping horsepower and pipeline looping.
Chesapeake committed to supply 75,000 b/d for the pipeline's 5-year ramp-up period and can secure additional capacity in the project. The company says it views this agreement as an important step toward obtaining premium transportation pricing for the volumes it will produce in the region.
The project will use a combination of new and existing systems (OGJ Online, Oct. 11, 2011). The binding open season for shippers to commit to the pipeline closed Nov. 10. The pipeline's committed shipper transportation rate would range 14.5-15.5¢/gal.
Through connections at EPP's NGL complex in Mont Belvieu, Tex., ethane production from the Marcellus and Utica shales would have access to every ethylene plant in the US. Enterprise anticipates the pipeline beginning commercial operations as early as first-quarter 2014.
DCP Midstream closes buy of Seaway Products
DCP Midstream has closed on its previously announced acquisition of the Seaway Products Pipeline Co. from ConocoPhillips.
DCP will convert the renamed Southern Hills Pipeline to NGL service, adding extensions to Mont Belvieu, Tex., and various US Midcontinent receipt points and associated gathering systems, creating new NGL transportation capacity from the Midcontinent to the Texas Gulf Coast. DCP Midstream will add a 130-mile extension from the pipeline's current northern terminus to Conway, Kan., the 30-mile extension to Mont Belvieu, and pump capacity and to the current 580-mile pipeline (OGJ Online, June 13, 2011).
The company anticipates Southern Hills having capacity to ship about 150,000 b/d of Y-grade NGL and expects it to enter service as early as mid-2013. DCP Midstream will operate Southern Hills as a common carrier pipeline, connected to several DCP Midstream processing plants and anticipated third-party NGL producers.
DCP reached a long-term anchor agreement with Targa Resource Partners LLC in May for capacity at Targa's 100,000 b/d fractionation expansion at Mont Belvieu (OGJ Online, May 10, 2011).
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